Social Security for Great Britain—A Review of the Beveridge Report 1

M A R T H A D . R I N G *

The Interdepartmental Committee on Social Insurance and Allied Services was appointed in June 1941 to undertake a survey of the existing British programs of social insurance and allied services, with special reference to their interrelations, and to make recommendations for consideration by the Parliamentary Committee on Reconstruction Problems. In view of the official connections of the depart-mental representatives of the Committee and the issues of high policy involved, Sir William Beveridge, as Chairman, was authorized in January 1942 to regard the departmental representatives not as co-authors of the report but as advisers and assessors of the various technical and administrative matters with which they are concerned. Sir William is, therefore, alone responsible for the report and recom­mendations, which were submitted to Parliament on December 2, 1942.

E X P R E S S I N G HIS B E L I E F t h a t the B r i t i s h people have the mater ia l and sp i r i tua l power to abolish want , Sir W i l l i a m Beveridge sets f o r t h the direc­t i on , scope, content, and adminis trat ive f rame­work of a comprehensive unified system of social insurance and allied services as p a r t of a broad policy of reconstruction. The proposals of his report , he declares, "cover ground which must be covered, in one way or another, i n trans lat ing the words of the A t l a n t i c Charter into deeds. They represent, not on a t t e m p t by one nat ion to gain for its citizens advantages a t the cost of their fellow fighters i n a common cause, b u t a c o n t r i b u ­t ion to t h a t common cause." T h e y are con­cerned w i t h d i s t r i b u t i o n of whatever weal th is available to the B r i t i s h people i n order " t o deal f irst w i t h first things, w i t h essential physical

*Assistant Chief, Division of Publications and Review, Office of the Executive Dlrector; Marian Wayave and Florence C . Beal assisted in the construction of tables.

1 Beverldge, Sir William, Social Insurance and Allied Services, C m d . 0404, London, I I . M . Stationery Office, 1912, 299 pp. Appendix G, "Memoranda From Organizatlons," is issued as a separate publication: Social Insurance and Allied Services; Memoranda From Organizations, Appendix G to Report by Sir William Beverldge, C m d . 6405, London, II. M . Stationery Office, 1912, 244 pp. Rights of publication of an American edition were granted to the Macmillan Company, which has reproduced the report photographically from the English edition: Beverldge, Sir William, Social Insurance and Allied Services, New York, Macmillan, 1912, 299 pp.

For convenience of American renders, this review of the Beverldge report Includes dollar values of Brltish currency converted at the official exchange rate stabilized on Mar. 25, 1940, of $4,035 per pound sterling, unless otherwlse Indicated; for the same reason, it draws more heavily on sections of the report dealing with social security and social policy, the social security budget, and the details of the proposed plan than on those, describing the administrative and technical changes Involved.

needs. They are a sign of the belief t h a t the object of government i n peace and i n war is . . . the happiness of the common m a n . . . a belief which , through a l l differences i n forms of govern­ment . . . unites the U n i t e d Nat ions and divides them f rom their enemies."

T h e report recommends t h a t Parl iament a t once undertake consideration of measures to abolish w a n t by mainta in ing income security for a l l B r i t i s h citizens, regardless of income level . W a n t is recognized, however, as only one of the impediments to reconstruction. T h e others are disease, which often causes w a n t and brings other troubles i n i ts t r a i n ; ignorance, which no democ­racy can afford among i ts citizens; squalor, wh i ch arises ma in ly through haphazard d i s t r i b u t i o n of industry and popu la t i on ; and idleness, w h i c h destroys weal th and corrupts men, whether or not they are wel l fed. " I n seeking security n o t merely against physical w a n t , b u t against a l l these evils i n a l l their forms, and i n showing t h a t security can be combined w i t h freedom and enterprise and responsibil ity of the i n d i v i d u a l for his own l i fe , the B r i t i s h c o m m u n i t y and those who i n other lands have inheri ted the B r i t i s h t r a d i t i o n have a v i t a l service to render to h u m a n progress."

T h e framework of the social security p lan as a whole is a unif ied system of cash payments, geared to subsistence levels, to provide: c o n t r i b u ­t o r y social insurance protect ion for a l l persons of

w o r k i n g age, designed to cover a l l insurable risks so general t h a t they m a y affect a l l persons i n the popu la t i on ; noncontr ibutory publ ic assistance, conditioned on need, to m a i n t a i n subsistence income i n special cases of w a n t arising f r o m n o n -insurable risks and f r o m special situations among persons w i t h inadequate durat i on of c on t r ibutory social insurance coverage; and universal , n o n -c o n t r i b u t o r y children's allowances w i t h o u t a means test. These provisions for cash payments w o u l d be administered b y a N a t i o n a l M i n i s t r y of Social Security. I n add i t i on , the social security p l a n postulates a system of universal medical and rehab i l i ta t ion services administered by the health departments to prov ide—for a l l age groups, w i t h ­o u t means test or c ont r ibutory condi t ions—al l types of preventive, curat ive , and restorative measures necessary to m a i n t a i n heal th and w o r k ­ing capacity. Provisions for income maintenance above subsistence levels wou ld be le f t to v o l u n ­t a r y insurance, w h i c h the report stresses as a v i t a l l y i m p o r t a n t ad junct to the proposed nat ional p lan .

T h e unif ied social insurance program w o u l d be financed by a single flat weekly contr ibut i on v a r y ­i n g w i t h sex and age, paid b y insured persons, b y the employers of insured employees, and b y the Government ; the Government w o u l d boar the ent ire costs of publ ic assistance and children's allowances; the costs of medical and rehab i l i ta ­t i o n services wou ld be met i n p a r t f r o m c o n t r i b u ­t ions collected under the social insurance program and i n large p a r t f rom Government funds.

Social S e c u r i t y a n d Social Po l icy

Social security, as used i n the report , denotes the assurance of an income to replace earnings i n t e r r u p t e d b y unemployment , sickness, or acci­dent , to provide for old-age ret irement , to protect the f a m i l y against loss of support result ing f r om the death of the breadwinner, and to meet excep­t i ona l expenditures such as those connected w i t h b i r t h , marriage, and death. I n sett ing f o r t h the details of his social security p lan , Sir W i l l i a m makes three special assumptions w i t h o u t wh i ch , ho believes, no satisfactory system of income m a i n ­tenance can be established: (1) t h a t the Govern ­m e n t w i l l pay noncontr ibutory f la t allowances for ch i ldren up to the age of 15, or to age 16 i f they are i n f u l l - t i m e attendance at school, for a l l chi ldren

other t h a n the f irst ch i ld when the parent is earn­ing , and for the first child i n add i t i on , d u r i n g i n t e r -r u p t i o n of earning; (2) t h a t a nat ional system of comprehensive hea l th and rehabi l i ta t ion services, available to a l l members of the c o m m u n i t y , w i l l be established for prevention and care of disease and restoration of capacity for w o r k ; and (3) t h a t substantial ly f u l l employment w i l l be mainta ined b y prevention of mass unemployment . 2

The report outlines the principles, methods, and costs of establishing the proposed social security p lan and prov id ing children's allowances and health and rehabi l i tat ion services. A c t u a l pro ­cedures for ma inta in ing employment are recog­nized as beyond the scope of the recommendations. The need for such provision as a foundation for any comprehensive plan for social insurance, social assistance, and social services rests on the belief t h a t idleness is demoralizing, even when there is income; t h a t w i t h o u t an offer of work there is no satisfactory test of unemployment or of e l ig ib i l i ty for unemployment or d isabi l i ty benefits; t h a t i n t ime of active demand for labor, as in war, there are incentives for the rehabi l i tat ion and recovery of in jured and sick persons through the chance of a happy and useful career; t h a t income security, as contrasted w i t h a reasonable chance for product ive employment, is so inadequate a provision for h u ­m a n happiness t h a t i t is hard ly w o r t h considera­t i o n as a solo or pr inc ipal measure of reconstruc­t i o n ; and t h a t unemployment , by increasing ex­penditures for benefits and reducing the income to bear such costs, is the worst f orm of waste.

E x i s t i n g social insurance and assistance pro ­grams i n Great B r i t a i n take account of a l l major threats to income maintenance—industr ia l acci­dent and disease, nonindustr ia l sickness and dis­a b i l i t y , unemployment , o ld age, widowhood, and orphanage—but the provisions to meet these risks have been piecemeal i n development, l i m i t e d i n compulsory insurance coverage, inadequate i n benefits, and excessively complex i n organization and adminis t rat ion . The remedy which the Beveridge report proposes for Great B r i t a i n lies i n reorganizing and expanding the insurance programs to provide subsistence benefits, irrespective of the amount of in terrupted earnings; compulsory con­tr ibut ions v a r y i n g w i t h age, sex, and source of income, payable b y a l l persons of w o r k i n g age,

2 I n framing the budget for the proposed plan, it was assumed that the average rate of unemployment in the future will be about 8.5 percent.

regardless of means; 3 a unif ied system of adminis ­t ra t i on which would permi t weekly payment of a single contr ibut i on into a single social insurance fund f rom which a l l benefits and other insurance payments would be made; benefits adequate i n amount and durat i on to provide the m i n i m u m income needed for subsistence i n a l l normal cases, to be continued indefinitely w i t h o u t a means test so long as the need persists, though subject to change of conditions and treatment required by occupation and prolonged i n t e r r u p t i o n of earnings; comprehensive and compulsory coverage of a l l persons and of a l l r isks—such as b u r i a l costs—so general and so un i f o rm t h a t they should n o t be left to v o l u n t a r y insurance or public assistance; and provisions capable of ad justment to take account of the different ways of life of a l l classes of the communi ty—those dependent on wages or salaries, those earning i n other ways, those render­ing v i t a l unpaid services as housewives, those n o t yet of age to earn, and those past earning. (See tables 1 and 2.)

Social insurance is considered as the most i m ­p o r t a n t social security measure, b u t is recognized as only one of three approaches. I t must be supplemented by publ ic assistance (payable f r om

3 Persons of working age with annual Incomes of less than £75 ($303) ft year who are not employees would be permitted to elect exemption from contribu­tions and benefits; gainfully occupied housewlves would be permitted to elect exemption from contributions and in that event would be entitled only to beneflts which derlve from their husbands' contributions.

the N a t i o n a l Exchequer) and b y v o l u n t a r y i n ­surance. Publ ic assistance, par t i cu lar ly d u r i n g ' a t ransi t ional period, b u t for exceptional cases i n a l l periods, wou ld provide cash payments condi ­t ioned on need and adjusted to i n d i v i d u a l c i r ­cumstances; v o l u n t a r y insurance wou ld enable indiv iduals to m a i n t a i n higher standards of l i v i n g t h a n the basic m i n i m u m for subsistence. T h e Beveridge p lan for social security " i s not one for g iv ing to everybody something for n o t h i n g and w i t h o u t trouble, or something t h a t w i l l free the recipients forever thereafter f rom personal re ­sponsibilities. . . I t can be carried through only b y a concentrated determination of the B r i t ­ish democracy to free itself once for a l l of the scandal of physical w a n t for wh i ch there is no economic or mora l just i f i cat ion. W h e n t h a t effort has been made, the p lan leaves room and encouragement to a l l individuals . . . to satisfy and to produce the moans of satisfying now and higher needs than bare physical needs."

" W a n t , " Sir W i l l i a m says, " c o u l d have been abolished i n Great B r i t a i n jus t before the present war . I t can be abolished after the war , unless the B r i t i s h people are and remain very m u c h poorer then t h a n they were before, t h a t is t o say unless they remain less product ive t h a n they and the ir fathers were. There is no sense i n bel ieving . . . t h a t they w i l l and m u s t be less product ive . . . Reconstruction

Table 1.—Great Britain: Population in July 1939 and social security provisions under proposed plan, by class

Class

N u m ­ber of

persons ( in m i l ­lions)

C o n t r i b u t i o n provisions

Security provisions

Class

N u m ­ber of

persons ( in m i l ­lions)

C o n t r i b u t i o n provisions U n e m ­ploy ­ment

benefit 1

Disa­b i l i t y bene­

f i t 2

I n d u s ­t r i a l

pension

T r a i n ­ing

bene­fit 3

Re­t i r e ­

m e n t pension

Funeral grant

Hea l th and re­h a b i l i ­ta t i on service

Other provisions

I . Employees 18.4 Insured b y weekly c o n t r i b u ­t ion on employment book

X X X X X X Removal and lodging grant , i n d u s t r i a l grant

I I . Others gainful ly occupied 2.5 Insured by contr ibut ions on occupational card

( 3 ) X X X X I I I . Housewives 4 9.3 Insured on marriage through

housewife's policy ( 5 ) (5) (5) X X X X M a r r i a g e g r a n t , mater ­

n i t y grant , m a t e r n i t y benefit, 6 guardian ben­­­­­­ ­­­­­­­­­­­ ­­­­­­­I V . Others of w o r k i n g age 2.4 Insured b y contr ibut ions on

security card X X X X V . Persons under w o r k i n g

age 7 9.6 None X X Chi ldren 's allowance

V I . Persons ret ired and above w o r k i n g age

4.3 Insured b y contr ibut ions made d u r i n g w o r k i n g age

( 8 ) X X X

1 Includes provision for nongainful ly occupied wife of married m a n or adult dependent of single person.

2 Includes provision for nongainful ly occupied wife of married man or adu l t dependent of single person and removal and lodging grant .

3 Payable after 13 weeks of d i sab i l i t y . 4 Includes 1.4 m i l l i o n gainful ly occupied married women. 5 Payable to gainful ly occupied married women i n class I who have chosen

to make contr ibut ions . 6 Payable to a l l gainful ly occupied women.

7 Represent number of chi ldren under 14, i . e., present m i n i m u m age for leaving school. Proposed plan for children's allowances assumes age 16 as m i n i m u m age for leaving school.

8 Payable if industr ia l pension granted prior to ret irement age is larger than ret irement pension.

Source: Beveridge, Sir W i l l i a m , Social Insurance and Allied Services, C m d . 6404, H. M . Stationery Office, London , 1942, p . 123.

of social insurance and allied services to ensure security of income for a l l risks is a general a im on whi ch a l l reasonable men would agree. I t

involves changes affecting, m a n y sectional interests, b u t i t raises no issues of po l i t i ca l principle or of p a r t y . I t involves an immense

Table 2 . — Great Britain: Social security provisions under proposed plan

Social security provision Condit ions for f u l l benefits 1 Weekly amount payable 2

U n e m p l o y m e n t benefit N o t paid for first 3 days of unemployment unless unem­ployment lasts for at least 4 weeks.

M a n and u n g a i n f u l l y occupied wife 40s. ($8.07) M a n w i t h gainful ly occupied wife not receiv­

ing benefit 21s. ($4.84) D i s a b i l i t y benefit 3 N o t paid for first 3 days of d i sab i l i ty unless the d isab i l i ty

lasts for at least 4 weeks. Payable to person i n class I I on ly after first 13 weeks of

d i sab i l i ty .

Single person, aged 21 or over 24s. ($4.84) Gainfully occupied married woman 16s ($3.23) Adult dependent of single person 16s ($3.23) Single person, aged 18-20 20s ($4.04) Single person, aged 16-17 15s ($3.03) Training benefit Payable for m a x i m u m of 20 weeks to persons in class I I

who have lost their l ivel ihood, to widows (or deserted or separated wives) in class III, or to persons in class I V when i t becomes necessary for them to earn their l i v i n g .

Chi ld ' s allowance (average per chi ld) 8s. ($1.61)

Dependent's allowance Payable to adu l t dependent of single person receiving unemployment , d i sab i l i ty , or t ra in ing benefit.

Ret irement pension Payable to man aged 65 or over or woman aged 60 or over, subject to deduction for earnings.

Basic pension not payable at f u l l rate u n t i l end of transi ­t ional period of 20 years from beginning of new program.

M a n and nongainful lv occupied wife 40s. ($8.07) M a n w i t h gainful ly occupied wife not receiv­

ing benefit 24s. ($4.84) M a r r i e d woman contr ibutor w i t h husband

below pensionable age 24s. ($1.84) Single person 24s. ($1.84) Chi ld ' s allowance (average per chi ld) 8s. ($1.61) Pension increased if retirement postponed

after age 65 or 60, by 1s. (20 cents) a week for a single person, and by 2s. (40 cents) a week for a married couple, for each year of deferment.

I n d u s t r i a l pension 3 Payable in place of d i sab i l i ty benefit to person in class I disabled because of industr ia l accident or disease, if such d i sab i l i ty lasts more t h a n 13 weeks.

For to ta l d i sab i l i ty : 1/3 of estimated full-time earnings in period preceding d i s a b i l i t y but not more than £3 ($12.10) a week or less t h a n d i sab i l i t y benefit ( inc luding dependent's allowance).

For part ia l d i sab i l i t y : Pension proport ion­ate to estimated loss of earning power.

Chi ld ' s allowance (average per chi ld) 8s. ($1.61)

I n d u s t r i a l grant 3 Payable on worker 's death from industr ia l accident or disease, to w idow or other w h o l l y or m a i n l y dependent person.

N o t payable for deaths after m i n i m u m age of ret irement .

A m o u n t and form of grant to be determined by regulation.

Removal and lodgings grant Payable to person t a k i n g work or t r a i n i n g , at distance from present home, for a l l or part of expenses of removal and temporary lodging.

A m o u n t and form of grant to be determined by regulation.

Marriage grant Payable to woman in class I or I I Rate determined by number of contr ibut ions prior to marriage; from £1 ($4.04). for 40 weekly contr ibut ions u p to £10 ($10.35).

M a t e r n i t y grant Payable to married women and to other women i f insured i n class I or I I .

L u m p s u m £4 ($16.14)

M a t e r n i t y benefit Payable to gainful ly occupied woman on condit ion of not w o r k i n g d u r i n g 13-week period, inc luding date of chi ld 's b i r t h .

Benefit 36s ($7.20)

W i d o w ' s benefit Payable to w idow under age CO, for 13 weeks fol lowing husband's death.

Benefit 36s. ($7.20) Ch i ld ' s allowance (average per chi ld) 8s. ($1.61)

Guardian benefit Payable to w idow w i t h dependent chi ldren on cessation of widow 's benefits; subject to deduct ion for earnings.

Benefit 24s. ($4.84) Chi ld ' s allowance (average per chi ld ) 8s. ($1.61)

Ch i ld ' s allowance 3 Payable for each chi ld under 15 (or 16 i f in school) i f parent is receiving benefit or pension, and for each ch i ld after the first if parent is earning.

Average of 8s. ($1.61)

Funera l grant Payable to person responsible for funeral expenses N o t payable for death of any person aged 60 or over at

beginning of new program.

Age of deceased person: L u m p s u m 21 years or over £20 ($80.70) 10-20 years £16 ($60.52)

3-9 years £10 ($40.35) Under 3 years £6 ($24.21)

Med i ca l and rehabi l i tat ion service 3 Avai lab le to any person requir ing service in add i t i on , household help furnished if housewife needs hospital care.

N o cash payment .

Assistance payment 3 Payable to person for w h o m no insurance benefit is payable or whoso benefits require supplementat ion.

A m o u n t to be determined on basis of need.

1 Benefits subject to reduction for u n p a i d or "unexcused" contr ibut ions except for provisions marked w i t h a n asterisk, w h i c h w o u l d have no con­t r i b u t o r y requirements.

2 Do l lar amounts computed a t official exchange rate of $4.035 per pound sterl ing stabil ized on M a r . 25, 1940.

3 N o cont r ibutory requirements for d i sab i l i t y of industr ia l o r ig in . Source: Beverage Report , pp . 127-133, 135, 141, 150, 151, 175, 177.

work of detai l i n legislation and organisation for which time is essential, for which there m a y be loss time i n the uncertain a f termath of war than there is today. I f a p lan for freedom f rom want , so far as social security can give i t , is to be ready when the war ends, i t must be prepared dur ing the war. T o give effect to the p lan . . . re ­quires decisions of three k inds : decisions of principle, decisions of execution and detai l , and decisions of amount , t h a t is to say of rates of benefit and contr ibut ion . Decisions of the t h i r d k ind . . . do not need to be taken now; they can w a i t u n t i l the probable level of prices after the war is better known . Decisions of the first k i n d , . . . decisions of principle, can be taken now and need to be taken, i f any plan for social security is to be ready when the war ends."

The cost of subsistence in the future cannot be forecast accurately, and cannot be assumed to be the same for al l families or for a l l parts of the country. A subcommittee of the In te rdepar t ­mental Committee , using existing data on expend­itures of families i n industr ia l and agr icul tural areas, found t h a t the cost of rent , i n part icular , varied markedly by sections of the country and among families of the same size in the same parts of the country . The fact tha t expenditures for rent cannot be reduced dur ing temporary in ter ­ruptions of earnings raises questions for the future as to the desirabi l i ty of determining different levels of subsistence and benefits for w o r k i n g families in large cities, in smaller communities, and i n agr icul tural areas. I n establishing pro ­visional rates for benefits, however, Sir W i l l i a m makes no such di f ferentiat ion, w i t h the statement that the di f ferentiat ion, wh i ch should apply to contr ibut ion rates as well as benefits, can be made later w i t h o u t affecting the m a i n structure of the social security plan i f the change is considered desirable and practicable.

A t 1938 prices (table 3) , i t is estimated t h a t subsistence needs for food, c lothing , rent , fuel , l ight , and household sundries required a weekly expenditure of $7.82 for a man of w o r k i n g age and his wi fe . 4 Since not a l l expenditures can be made w i t h a m a x i m u m of economy and efficiency, 49 cents a week addit ional is considered necessary as a margin for waste. For a ret ired couple, w i t h lower requirements for food and c lothing and w i t h

4 Dollar expenditures in this instance are based on 1938 average official exchange rate of $1.8891 per pound sterling.

opportunit ies for m a k i n g permanent arrangements for housing at lower renta l , the budget needs are placed a t $7.25 a week. F o r single men of work ing age the estimated cost is $4.64 a week, and for ret ired men aged 65 or over, $4.36; for single work ing women the subsistence budget is $4.40 and for ret ired women aged 60 and over, $4.24. On the average, subsistence needs for a ch i ld under age 15 cost $1.71 a week i n 1938, w i t h no al low­ance for rent or marg in .

Table 3.—Great Britain: Weekly subsistence require­ments at 1938 prices 1

Sex and age

Weekly amount 1

Sex and age T o t a l Food C l o t h ­

ing Rent Fue l , l i g h t , and

sundries M a r g i n

A d u l t s , w o r k i n g age M a n and wife $7.82 $3.18 $0.73 $2.44 $0.08 $0.40 M a n 4.04 1.71 .37 1.60 .01 .37 Woman 4.40 1.47 .37 1.69 .01 .37

Retired persons: M a n and wife 7.25 2.81 .05 2.03 1.22 .40 M a n 4.30 1.47 .33 1.47 .73 .37 Woman 4.24 1.34 .33 1.47 .73 .87

Chi ldren : Average, a l l ages 1. 71 1.48 .20 .06 Under 5 years 1.30 1.10 . 14 .00 5-9 years 1. 73 1.47 .20 .00 10-13 years 2.02 1. 71 . 24 .00 14-15 years 2.20 1.83 .31 .00

1 Dollars computed at official exchange rate of $4.8894 per pound sterl ing (average for 1938). Totals may differ from sums of amounts because, in con­vert ing to dollars, amounts were not forced to add to totals.

Source: Beveridge Report , pp . 87-90.

I n suggesting benefit rates and children's a l ­lowances a t subsistence levels, the p lan assumes t h a t post-war costs of l i v i n g w i l l be 25 percent higher t h a n 1938 prices. Subsistence needs wou ld represent 40s. ($8.07) a week for a m a n and his wife l i v i n g together, and 24s. ($4.84) a week for a person l i v i n g alone, disregarding differences of seX and raising amounts to the nearest f u l l shi l l ing . For young persons aged 18-20 a provisional rate of 20s. ($4.04) a week i n benefits is suggested and a lower rate of 15s. ($3.03) for boys and girls aged 16-17. Instead of prov id ing for a post-war sub­sistence cost of 9s. ($1.82) a week for younger chi ldren, the p lan takes account of substantial publ ic provisions for children through school meals or free or below-cost m i l k and places the allowance a t 8s. ($1.61) a week. I f rents are kept a t pre-war levels, the provisional benefit rates would cover an increase of 33 percent i n other costs of l i v i n g , i n ­c luding the marg in . A somewhat larger propor­t i o n is allowed for marg in i n the ret irement pen-

Table 4 .—Great Britain: Weekly contribution rates for compulsory social insurance under present and proposed plans 1

Employed workers and program

Rates i n shillings and pence Rates i n dollars 2

Employed workers and program Present p lan Proposed p lan Present p lan Proposed p l a n Employed workers and program

General worker Agr icu l tura l worker Employee (class I ) General worker Agr icul tural worker Employee (class I )

Employed workers and program

T o t a l E m ­ployer

E m ­ployee T o t a l E m ­

ployer Em­ployee

Total Em­ployer

E m ­ployee T o t a l E m ­

ployer E m ­

ployee Tota l E m ­ployer

E m ­ployee T o t a l E m ­

ployer E m ­

ployee M e n

65 years and over: s. d. s. d. s. d. s. d. s. d. s. d. s. d. s. d. s. d. Tota l 1 10 1 10 0 0 1 3½ 1 3½ 0 0 7 6 3 3 4 3 $0.37 $0.37 $0.00 $0.26 $0.26 $0.00 $1.51 $0.66 $0.86

Unemployment insurance 0 10 0 10 0 0 0 3½ 0 3½ 0 0 .17 .17 0 .06 .06 0 Heal th insurance 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Pension 3 1 0 1 0 0 0 3 1 0 1 0 0 0 3 .20 .20 0 3 .20 .20 0 21-64 years:

Total 3 8 1 10 1 10 2 7 1 3½ 1 3½ 7 6 3 3 4 3 .74 .37 .37 .52 .26 .26 1.51 .66 .86 Unemployment insurance 1 8 0 10 0 10 0 7 0 3╜ 0 3½ .34 .17 .17 .12 .06 .06 Heal th insurance 4 0 11 0 5½ 0 5½ 0 11 0 5½ 0 5½ .18 .09 .09 .18 .09 .09 Pension 1 1 0 6½ 0 6½ 1 1 0 6½ 0 6½ .22 .11 .11 .22 .11 .11

18-20 years: Tota l 3 6 1 9 1 9 2 6 1 3 1 3 6 3 2 9 3 6 .71 .35 .35 .50 .25 .25 1.26 .55 .71

Unemployment insurance 1 6 0 9 0 9 0 6 0 3 0 3 .30 .15 .15 .10 .05 .05 Health insurance 4 0 11 0 5½ 0 5½ 0 11 0 5½ 0 5½ .18 .09 .09 .18 .09 .09 Pension 1 1 0 6½ 0 6½ 1 1 0 6½ 0 6½ .22 .11 .11 .22 .11 .11

16-17 years: Tota l 2 10 1 5 1 5 2 4 1 2 1 2 5 0 2 6 2 6 .57 .28 .28 .47 .24 .24 1.01 .50 .50

Unemployment insurance 0 10 0 5 0 5 0 4 0 2 0 2 .17 .08 .08 .07 .03 .03 Health insurance 4 0 11 0 5½ 0 5½ 0 11 0

5½ 0 5½ .18 .09 .09 .18 .09 .09 Pension 1 1 0 6½ 0 6½ 1 1 0 6½ 0 6½ .22 .11 .11 .22 .11 .11

Under 16 years: Tota l 0 8 0 4 0 4 0 7 0 3½ 0 3½ .13 .06 .06 .12

.06 .06 Unemployment insurance 0 4 0 2 0 2 0 3 0 1½ 0 1½ .07 .03 .03 .05 .03 .03 Health insurance 0 4 0 2 0 2 0 4 0 2 0 2 .07 .03 .03 .07 .03 .03 Pension 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

W o m e n 60 years and over:

Tota l 1 6 1 6 0 0 1 0 1 0 0 0 6 0 2 6 3 6 .30 .30 0 .20 .20 0 1.21 .50 .71 Unemployment insurance 0 9 0 9 0 0 0 3 0 3 0 0 .15 .15 0 .05 .05 0 Health insurance 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Pension 3 0 9 0 9 0 0 3 0 9 0 9 0 0 3 .15 .15 0 3 .15 .15 0

21-59 years: Tota l 3 1 1 6 1 7 2 1 1 0 1 1 6 0 2 6 3 6 .62 .30 .32 .42 .20 .22 1.21 .50 .71

Unemployment insurance.. 1 6 0 9 0 9 0 6 0 3 0 3 .30 .15 .15 .10 .05 .05 Health insurance 4 0 10½ 0 5½ 0 5 0 10½ 0 5½ 0 5 .18 .09 .08 .18 .09 .08 Pension 0 8½ 0 3½ 0 5 0 8½ 0

3½ 0 5 .14 .06 .08 .14 .06 .08

18-20 years: Tota l 2 11 1 5 1 6 2 0 0 11½ 1 0½ .59 .28 .30 .40 .19 .21 1.01 .40 .61

Unemployment insurance 1 4 0 8 0 8 0 5 0 2½ 0 2½ .27 .13 .13 .08 .04 .04 Health insurance 4 0 10½ 0 5½ 0 5 0 10½ 0 5½ 0 5 .18 .09 .08 .18 .09 .08 Pension 0 8½ 0 3½ 0 5 0 8½ 0 3½ 0 5 .14 .06 .08 .14 .06 .08

16-17 years: Total 2 4 1 1½ 1 2½ 1 10 0 10½ 0 11½ 4 0 2 0 2 0 .47 .23 .24 .37 .18 .19 .81 .40 .40

Unemployment insurance 0 9 0 4½ 0 4½ 0 3 0 1½ 0 1½ .15 .08 .08 .05 .03 .03 Health insurance 4 0 10½ 0 5½ 0 5 0 10½ 0 5½

0 5 .18 .09 .08 .18 .09 .08 Pension 0 8½ 0 3½ 0 5 0 8½ 0 3½ 0 5 .14 .06 .08 .14 .06 .08

Under 16 years: Tota l 0 8 0 4 0 4 0 6 0 3 0 3 .13 .06 .06 .10 .05 .05

Unemployment insurance 0 4 0 2 0 2 0 2 0 1 0 1 .07 .03 .03 .03 .02 .02 Health insurance 0 4 0 2 0 2 0 4 0 2 0 2 .07 .03 .03

.07 .03 .03 Pension 0 0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0

1 Present plan as of 1942; proposed plan would begin as of July 1, 1944. Contribution rates under the present plan for members of Crown forces and other special groups are not shown here Pro­posed rates for insured persons in classes I I and I V are shown in table 5

2 Dollars computed at official exchange rate of $4.035 per pound sterling stabilized on M a r . 25, 1940. Totals may differ from sums of amounts because, i n converting to dollars, amounts were not forced to add to totals.

3 Represents the sum of rates payable by employer for employed persons for health insurance and pensions; the port ion for health insurance is transferred from the pension account to the health insurance funds.

4 For low-paid workers aged 18 and over whose remuneration does not include board and lodging provided by employer, rates are adjusted as follows: When worker's remuneration exceeds 3s. but not 4s. a day, employer's contribution increased (and worker's decreased) by 1d.; when remuner­ation does not exceed 3s., employer pays total contribution. For masters and seamen serving on a foreign-going ship, rates are reduced 3d.

Source: Beveridge Report, pp . 174, 227-229.

sions, since the subsistence needs of ret ired older persons are lower t h a n for persons of w o r k i n g age.

T h e Scope o f t h e Soc ia l S e c u r i t y P l a n

Coverage Under the social security p lan proposed, v i r t u ­

a l ly the entire working-age populat ion of Great B r i t a i n would begin on J u l y 1, 1944, to contr ibute toward a unified social security fund and would acquire r ights t oward benefits representing sub­sistence costs of l i v i n g whenever normal income is in terrupted by unemployment , d isabi l i ty , o l d -age ret irement , or death of the income producer. The estimated 1944 populat ion of Groat B r i t a i n is d iv ided into six classes, as follows:

Class I , employees (13,350,000 men, 4,750,000 women) comprising persons whose normal occu­pat ion is employment under contract of service, inc luding m i l i t a r y and c iv i l ian personnel i n Government service;

Class I I , others gainful ly occupied (2,150,000 men, 450,000 women) including employers, traders, and independent workers of al l k inds ;

Class I I I , housewives, i . e., marr ied women of work ing age (9,450,000), inc luding those ga infu l ly occupied;

Class I V , other persons of work ing age who are not gainful ly occupied (1,000,000 men, 1,300,000 women) , inc luding students aged 16 and over, persons of pr ivate means, unmarr ied women en­gaged i n housework w i t h o u t pay, and disabled persons;

Class V , children below w o r k i n g age, under age 15 or under age 16 i f a t school (5,000,000 boys, 4,800,000 g i r l s ) ;

Class V I , ret ired persons above w o r k i n g age (1,200,000 men aged 65 and over, 3,550,000 women aged 60 and over) .

Contributions E v e r y person i n classes I , I I , or I V would pay,

each week or other specified period, a single insurance contr ibut i on , di f fering w i t h source of income, sex, and age. T h e employer of workers i n class I w o u l d also contr ibute , affixing an insur­ance stamp to the worker 's employment book and deducting the worker 's share f r om his wages or salary. Employers insuring on their own behalf and other self-employed persons (class I I ) wou ld contribute b y affixing stamps to an occupation

card. Persons i n class I V w o u l d affix the i r o w n stamps to social security cards.

F o r a l l adu l t age groups, contr ibutions for men would be higher t h a n for women to provide funds for benefits to wh i ch nongainful ly occupied house­wives wou ld be ent i t led when their husbands re ­ceive benefits. A "housewife's po l i cy , " issued on marriage, wou ld determine these r ights to benefits. M a r r i e d women who are gainful ly employed m i g h t , however, elect to contr ibute as class I or class I I workers, depending on the ir occupational status, and i n t h a t event would receive i n their own r i g h t benefits for d i sab i l i ty , unemployment , and re t i re ­ment .

Chi ldren below w o r k i n g age wou ld be exempt f r o m contr ibut ions . The p lan assumes t h a t c h i l ­dren's allowances, payable f rom the N a t i o n a l E x ­chequer, w o u l d be granted on behalf of a l l such chi ldren when the responsible parent or guardian is receiving insurance benefits and on behalf of a l l b u t the first ch i ld of eligible age i n a l l other families. Persons i n class V I and those i n receipt of other benefits w o u l d be excused f r o m c o n t r i ­butions. Persons of ret irement age who remain at w o r k wou ld continue to contr ibute and to be

Table 5.—Great Britain: Weekly contribution rates for compulsory social insurance under proposed plan, beginning July 1944

Sex and age group

Employees 1 (class I ) Other gainfully

occu­pied 1 2

(class I I )

Others of work­ing age 2

(class I V ) Sex and age group

T o t a l Insured persons

Em­ployers

Other gainfully

occu­pied 1 2

(class I I )

Others of work­ing age 2

(class I V )

Rates i n shil l ings and pence

M e n : s. d. s. d. s. d. s. d. s. d. 16-17 5 0 2 6 2 6 2 0 1 6 18-20 6 3 3 6 2 0 3 6 3 0

21 and over 7 6 4 3 3 3 4 3 3 9 W o m e n :

16-17 4 0 2 0 2 0 2 0 1 6 18-20 5 0 3 0 2 0 3 ? > 0 2 6 21 and over 6 0 3 6 2 9 3 i 0 3 0

Rates i n dollars 3

M e n : 16-17 $1.01 $0.50 $0.50 $0.40 $0.30 18-20 1.26 .71 .55 .71 . 6 1 21 and over 1.51 .80 .66 .86 .70

W o m e n : 16-17 .81 .40 .40 .40 .30 18-20 1.01 .61 .40 .61 .50 21 and over 1.21 .71 .50 .76 . 6 1

1 Includes gainful ly occupied housewife unless she elects to be exempt f rom contr ibut ions and therefore is ent i t led only to m a t e r n i t y grant and benefit and other benefits based on husband's insurance.

2 Excludes persons w i t h to ta l income of less t h a n £75 a year w h o elect to be exempt from payment of contr ibut ions w i t h resulting loss of benefit r ights .

3 Dollars computed at official exchange rate of $4.035 per pound sterl ing stabilized on M a r . 25, 1940. Totals m a y differ from sums of amounts because, i n convert ing to dollars, amounts were not forced to add to totals ,

Source: Beveridge Report , p . 174.

eligible for a l l types of bonefits. Ret i rement benefits wou ld be increased for each year of con­t r ibut i ons after a t ta inment of ret i rement age.

A comparison of weekly contr ibut i on rates for employees (class I ) under the proposed p lan w i t h corresponding rates under the present system appears i n table 4. Proposed rates of c o n t r i b u ­t i o n for each class of insured persons and each age group of persons of w o r k i n g age are shown i n table 5; they v a r y f r o m 4s. 3d. (86 cents) a week for adu l t men employees to 2s. (40 cents) a week for boys and girls i n class I I and Is . 6d. (30 cents)

a week for boys and girls i n class I V . Employers w o u l d contr ibute f r o m 2s. to 3s. 3d. (40-66 cents) a week on behalf of each of the ir employees; the amount wou ld v a r y w i t h the age and sex of the worker .

I t is estimated t h a t these insurance c o n t r i b u ­tions would be sufficient, w i t h specified Govern­ment contr ibut ions , to finance the basic benefits d u r i n g periods of unemployment , d isab i l i ty , or ret irement . I n addi t ion , the insurance c o n t r i b u ­tions, inc luding the share of the Exchequer, would finance marriage grants, m a t e r n i t y benefits and

Tab le 6.—Great Britain: Social security expenditures for 1938-39 and estimated expenditures under present plan for 1945 and under proposed plan for 1945, 1955, and 1965, by program

[ i n mi l l ions ]

Program

A m o u n t in pounds sterl ing A m o u n t in dollars 1

Program Present p lan Proposed p lan Present plan Proposed plan Program

1938-39 1945 1945 1955 1965 1938-39 1945 1945 1955 1965

T o t a l 334 415 697 764 858 1,348 1,675 2,812 3,083 3,462

Social insurance 243 310 367 442 553 981 1,251 1,481 1,783 2,231 Benefits 213 296 349 424 535 859 1,170 1,408 1,711 2, 159

U n e m p l o y m e n t benefits ( inc lud ing t r a i n ­ing benefit) 2 90 2 84 110 109 107 2 363 2 339 444 440 432

D i s a b i l i t y benefits other t h a n indus t r ia l 19 27 3 57 68 71 77 109 3 230 274 286 I n d u s t r i a l d i sab i l i ty benefits, pensions, and

grants 10 13 4 15 15 15 40 52 4 61 61 61 Ret i rement pensions (old age) 5 94 6 163 126 190 300 5 379 6 658 508 767 1,211 W i d o w s ' and guardian benefits 29 26 21 117 105 85 M a t e r n i t y grants and benefits 7 3 7 6 6 7 12 28 21 24 Marr iage grants 1 3 3 4 12 12 Funera l crants 8 4 7 12 8 16 28 48

A d m i n i s t r a t i v e costs 9 22 9 20 10 18 18 18 9 89 9 81 10 73 73 73 Other payments 11 8 11 32

N a t i o n a l assistance 26 15 47 41 32 105 61 100 165 129 Assistance pensions 39 33 12 25 157 133 12 101 Other assistance 13 26 14 15 5 5 5 13 105 14 61 20 20 20 A d m i n i s t r a t i v e costs (15) (15) 3 3 2 (15) (15) 12 12 8

Chi ldren 's allowances 11 113 111 103 44 456 - 148 416 Allowances 11 110 108 190 44 444 436 401 A d m i n i s t r a t i v e costs (15) 3 3 3 (15) 12 12 12

H e a l t h and rehabi l i tat ion services 16 65 17 79 18 170 170 170 16 262 17 319 18 686 686 686

1 Dollars computed at official exchange rate of $4.035 per pound sterl ing stabilized on M a r . 25,1940. Totals may differ from sums of amounts because, i n convert ing to dollars, amounts were not forced to add to totals.

2 Includes unemployment assistance b u t excludes proposed t ra in ing benefits.

3 Based on assumption of benefits at new proposed rates for a l l persons i n receipt of disablement benefits at beginning of new program; if permanent inva l ids among recipients of disablement benefits receive pensions at rising rates d u r i n g transit ional period 1945-65, this figure wou ld be reduced to £47 m i l l i o n .

4 Includes to ta l cost of existing cases of prolonged d i sab i l i ty ; a l l present weekly payments w i l l be raised to new rates w i t h offset against the amount shown, in the reserves held by insurance companies and associations to cover the i r l iabi l i t ies at present rates.

5 Represents £79 m i l l i o n for contr ibutory widows ' , orphans' , and old-age pensions, and £15 m i l l i o n for noncontr ibutory old-age pensions.

6 Represents £94 m i l l i o n for c ont r ibutory old-age pensions and pensions t o widows aged 60 and over; £12 m i l l i o n for widows under 60; £10 m i l l i o n f or noncontr ibutory pensions; and £47 m i l l i o n for supplementary pensions.

7 Grants not payable under present p lan . 8 A t outset, persons then aged 60 or over are to be excluded from provisions. 9 Includes adminis t rat ive costs for nat ional assistance and chi ldren 's

allowances. 1 0 I t is assumed t h a t the scope of assistance in w h i c h adminis trat ive costs

are re lat ive ly high w i l l be greatly decreased and t h a t such costs, w h i c h totaled about £7 m i l l i o n for central and local adminis trat ion i n 1938-39, should certainly not exceed £ 3 m i l l i o n in 1945. Costs of administer ing in­d u s t r i a l d i sab i l i t y benefits and pensions should not be more t h a n 10 percent of the m u c h higher benefits provided. £10 m i l l i o n is allowed for administer­ing a l l other social insurance programs as compared w i t h £14 m i l l i o n i n

1938-39. an apparently reasonable assumption when increase in prices and in total scope of the program is onset against economics which w i l l follow administrat ive coordination.

11 Includes £ 3 m i l l i o n applied toward reduction of debt . 12 The most impor tant groups included are: (1) women aged 60-70, not

ent i t l ed to present contr ibutory pensions ( i t may be assumed that c la im­ants for assistance w i l l increase material ly from this group) ; (2) persons between age 55 (50 for women) and 70 at outset, who are outside present scope of c ontr ibutory pensions and who either w i l l be exempt from c o n t r i ­butions under proposed plan or w i l l qual i fy for such inadequate pensions when they reach retirement age (long before 1965) that they w i l l be in need; and (3) persons in classes I I and I V who, because their annual income is below £75, w i l l not qua l i fy for contr ibutory pensions.

13 Represents £24 m i l l i o n for publ ic assistance (out relief) and £ 2 m i l l i o n for assistance to b l i n d persons. Excludes £35 m i l l i o n for unemployment assistance, wh i ch was included w i t h unemployment benefits.

14 Other than noncontr ibutory and supplementary pensions included under ret irement pensions.

15 Inc luded w i t h social insurance adminis trat ive costs. 16 Represents £15 m i l l i o n included in Nat ional Heal th Insurance and

£50 m i l l i o n for other health services met from publ i c funds. 1 7 Represents £10 m i l l i o n included in Nat ional Hea l th Insurance and

£60 m i l l i o n for other health services met from publ i c funds. 18 Rough estimate on assumption t h a t hospital treatment and al l other

treatment are inc luded in health service through compulsory social insur­ance contr ibut ions w i t h o u t further v o l u n t a r y contr ibut ions or charges. Est imate also assumes expansion of services from 1945 w i t h corresponding reduct ion in number of cases requir ing service.

Source: Beveridge Report , pp . 112, 191, 199, 201, 203, 204, 214, 241.

grants, widow's benefits, guardian's benefits, bene­fits to wives separated f rom their husbands, and funeral grants for the entire populat ion . Costs of children's allowances would be met f r om the Nat ional Exchequer; approximately one- fourth of the costs of medical t reatment and rehabi l i ta ­tion services would come f rom the insurance fund and three-fourths f r o m the N a t i o n a l Exchequer and local tax receipts. D u r i n g a 20-year t rans i ­tional period, certain i n t e r i m rates of benefits are assumed for ret irement pensions and m a y be desirable for d isab i l i ty benefits.

Eligibility For current risks, such as unemployment,

nonindustrial d isabi l i ty , and survivorship, e l igi ­b i l i t y for benefits would be dependent upon the payment of at least 48 contr ibut ions i n a c o n t r i b u ­tion year, except t h a t contr ibut ions for persons receiving benefits would be waived or "excused," i . e., credited as i f paid . For old-age ret irement, the e l ig ib i l i ty requirement would be an average of 48 paid or waived weekly contr ibut ions a year throughout the work ing l i fe of the insured person from the beginning of the proposed program. Reduced benefits would be provided for persons who do not qual i fy for f u l l payments, and public assistance, on a needs basis, would be available for persons whose ine l ig ib i l i ty for f u l l benefits brings them below subsistence levels. Special qual i fy ing conditions for m a t e r n i t y benefits and for funeral grants may be necessary and, when the program is i n f u l l operation, special i n i t i a l q u a l i ­fy ing contr ibut ions would be required, except for disabi l i ty of industr ia l or ig in and widow's or guardian's benefits.

Total Costs Under the provisions of the plan i t is estimated

that the social security program would cost £697 mi l l ion ($2,812 mi l l i on ) i n 1945, £764 m i l l i o n ($3,083 mi l l i on ) i n 1955, and £858 m i l l i o n ($3,462 mil l ion) i n 1965, inc luding, i n add i t i on to cash i n ­surance benefits, adminis t rat ive expenses, c h i l ­dren's allowances, publ ic assistance, and nat ional health services (table 6) . C o n t r i b u t o r y social i n ­surance benefits represent about 50 percent of the to ta l i n 1945, 56 percent i n 1955, and 62 percent i n 1965; publ ic assistance expenditures represent 7, 5, and 4 percent of the t o t a l i n the 3 years, respectively; children's allowances account for

16, 15, and 12 percent; administrat ive costs for a l l the foregoing services account for 3, 2, and 2 percent, respectively; whi le health services repre­sent 24, 22, and 20 percent.

Source of Funds The new social security p lan is based on the t r i ­

par t i t e system of contr ibut ions established w i t h the unemployment insurance program i n 1911— Government contr ibut ions f r o m the N a t i o n a l E x ­chequer representing contr ibutions of citizens as taxpayers, compulsory contr ibutions f r o m insured persons as potent ia l beneficiaries, and c o n t r i b u ­tions f r o m employers taxed for employment . The inst i tut ions for medical t reatment and for domic i l iary care of recipients of publ ic assist­ance would be financed i n p a r t f r o m local funds, br ing ing i n a f o u r t h source of income—citizens as local property taxpayers. T h e expenditures of local authorit ies for all ied social services (such as housing, education, maternal and chi ld welfare), though closely related to social security, are n o t reckoned i n the social security budget.

" T h e d ist inct ion between taxat ion and insurance contr ibut i on is t h a t taxat ion is or should be related to assumed capacity to pay rather t h a n t o the value of w h a t the payer m a y expect to receive, while insurance contr ibutions are or should be related to the value of the benefits and n o t t o capacity to pay. W i t h i n insurance a further dis­t inc t i on m a y be d r a w n between v o l u n t a r y and compulsory insurance. I n v o l u n t a r y insurance, the contr ibut ion is a p r e m i u m which must be adjusted to some extent to the degree of r i s k ; per­sons w i t h l o w risks must be allowed to pay less for the same rate of benefit t h a n those w i t h h i g h r isks ; otherwise they w i l l no t insure. I n com­pulsory insurance, the contr ibut i on m a y v a r y w i t h the r i sk b u t need no t do so. . . "

Suggestions t h a t social security should be financed who l ly f r o m general taxat ion or t h a t i t should be financed f r o m earmarked special taxes ore dismissed b y Sir W i l l i a m on the ground t h a t they break w i t h the c ont r ibutory principles on whi ch insurance programs are based. As a fur ther argument against assignment of taxes to special purposes, he cites the gasoline tax w h i c h was introduced specifically to improve roads for motor t ranspor ta t i on ; such earmarking, however, proved no assurance t h a t the proceeds of the tax would be applied solely t o the or iginal purpose.

The contr ibutory principle is retained i n the p l a n because (a) insured persons can pay and l ike t o pay and wou ld rather pay t h a n n o t ; (b) i t is desirable to keep the social insurance fund self-contained, w i t h defined responsibilities and de­fined sources of income, i n order t h a t insured persons may realize t h a t they cannot get increased benefits w i t h o u t increased contr ibutions, m a y sup­p o r t measures for economical adminis trat ion , and m a y realize t h a t the Government is no t the dis­penser of gifts for which no one needs to p a y ; and (c) contributions provide an automatic record b y wh i ch the insured persons m a y be classified i n accordance w i t h their type of occupation and b y w h i c h their claims for part icular benefits m a y be tested.

I n general, Sir W i l l i a m believes t h a t the argument for employers' contr ibut ions to the i n ­surance system is not so strong as is t h a t for requ i r ing contr ibut ions f r o m insured persons.

T a b l e 7.—Great Britain: Social security income for 1938-39 and estimated income under present plan for 1945 and under proposed plan for 1945, 1955, and 1965, by source of funds

Year T o t a l Contr ibut ions Interest

on exist­­­­

funds

Excheq­uer 1

Year T o t a l Insured persons

E m p l o y ­ers

Interest on exist­

­­­funds

Excheq­uer 1

A m o u n t i n mi l l i ons of pounds ster l ing

Present program: 2

1938-39 342 55 66 9 212 1945 432 69 83

15 265 Proposed program:

1945 697 194 3 137 15 351 1955 764 196 3 135 15 418 1965 858 192 3 132 15 519

A m o u n t in mi l l i ons of dollars 4

Present program: 2

1938-39... 1,380 222 266 36 855 1945 1,743 278 335 61 1,069

Proposed program: 1945 2,812 783 3 553 61 1,416 1955 3,083 791 3 545 61 1,687 1965 3,462 775 3 533 61 2,094

Percentage d i s t r i b u t i o n

Present program: 2

1938-39 100 16 19 3 62 1945 100 16 19 4 61 Proposed program:

1945 100 28 3 20 2 50 1955 100 25 3 ]3 2 55 1965 100 22 3 15 2 61

1 Represents balance m e t from Exchequer and/or local tax receipts. 2 Includes social insurance systems and al l ied services.

3 Includes payments from reserves held by employers (or the i r insurers) for compensation on o ld scales to persons in jured before J u l y 1944, a m o u n t i n g to £ 6 m i l l i o n for 1945 and £ 5 m i l l i o n for 1955 and 1965.

4 Dol lars computed at official exchange rate of $4.035 per pound sterl ing stabil ized on M a r . 25, 1940. Tota ls m a y differ from sums of amounts because, i n converting to dollars, amounts were n o t forced to odd to totals .

Source: Beveridge Report , p p . 112, 206, 207.

The employer's tax is no t related to his prof i ts or his capacity to pay ; i t varies w i t h the extent to which ho uses labor and not w i t h the extent to which , i n the management of his business, ho endeavors to prevent unemployment or sickness. The employer's tax, however, can be described as an add i t i on to wages; i t can and should be re­garded as a proper par t of the cost of product ion ; i t is i n the employer's interest t h a t his employees are maintained d u r i n g inevitable intervals of u n ­employment or illness and t h a t they should have an income which helps to make them efficient producers. Employers should, and most do, feel concerned w i t h the lives of those who work under their control . Employers should also have a definite interest, based on contr ibut ions , i n the adminis t rat ion and improvement of social insur­ance. Special contr ibut ions of employers to cover the r isk of industr ia l accident and illness arc described below under industr ia l d isabi l i ty .

Under the existing program for social insurance and allied services, 1G percent of the income of £342 m i l l i o n ($1,380 mi l l ion) i n 1938-39 was derived f rom insured persons, 19 percent f rom employers, and G5 percent f rom public funds, inc luding 3 percent in interest on existing social insurance funds. Est imated income for 1945 would be £90 mi l l i on ($363 mi l l i on ) higher or a t o t a l of £432 mi l l i on ($1,743 mi l l i on ) , d i s tr ibuted i n approximately the same proportions. Under the proposed plan, the 1945 income is estimated at £697 mi l l i on ($2,812 mi l l i on ) , more than twice t h a t of 1938-39, and 61 percent above the estimate for the existing programs in 1945. The share borne by insured persons under the new program would increase by about 80 percent, representing in par t the contr ibut ions of insured persons newly i n ­cluded i n coverage. Employers would contr ibute approximately the same percent of the to ta l as a t present (20 percent) and the amount derived f r o m public funds, although £86 m i l l i o n ($347 mi l l i on ) more t h a n t h a t estimated for the existing program, wou ld represent only about half of the t o t a l . N o t u n t i l 1965 would public funds pro ­vide as h igh a proport ion of t o ta l income as under the existing program. (See table 7.)

The Beveridge report expl ic i t ly denies t h a t there is a n y t h i n g sacred about the d iv is ion of f inancial responsibil ity suggested; i t is no more t h a n a basis for discussion. " I t is possible to argue t h a t the contr ibut i on of employers should

Table 8.—Great Britain: Average weekly expenditures on security in households of industrial workers, 1937-38 prices 1

Class of expenditure

Average weekly expenditures

Class of expenditure A t 1937-38 prices Per a d u l t man at

25-percent increase

in prices 2

Class of expenditure

Per house­hold

Per adu l t m a n

Per a d u l t man at

25-percent increase

in prices 2

T o t a l $1.50 $1.15 $1.44

Vo luntary insurance premiums, payments to pension funds, etc .58 .45 .56

Medical treatment, inc luding hospital , doc­tor, dentist , opt ic ian, midwi fe , nursing, drugs, and appliances .41 .31 .39

Compulsory insurance .51 .39 .49

1 Dollars computed at official exchange rate of $4.9167 per pound sterl ing (average of rates for calendar years 1937 and 1938).

2 Increase shown for comparison w i t h contr ibut ion rates assumed for pro­posed social security p lan .

Source: Beveridge Report, p . 115.

be reduced, at the cost either of the insured persons or of the N a t i o n a l Exchequer. O n behalf of insured persons i t can be argued t h a t even i f the contr ibut ion proposed is w i t h i n the capacity of most adu l t men, i t is no t w i t h i n t h a t of persons w i t h low wages, and t h a t these should be relieved at the cost of the taxpayer or the employer. . . "

I t is estimated (table 8) t h a t i n 1937-38 indus­t r ia l workers spent an average of $1.50 per household per week for security, i . e., for v o l u n t a r y insurance, medical care, and compulsory insurance contributions. For an adu l t male these expendi­tures averaged $1.15 a week. The expenditures shown i n the table are average expenditures, not those of the poorest families; individuals w i t h incomes of less than $8 a week paid on the average 55 cents a week for security, while those w i t h weekly incomes between $16 and $20 paid 70 cents a week. Under the Beveridge proposals the capacity of lower-paid workers to con­tr ibute toward social insurance w i t h o u t depleting resources needed for subsistence would be i n ­creased mater ia l ly by children's allowances. Furthermore , " c o n t r i b u t i o n s for v o l u n t a r y insur­ance must in general be paid whether the c o n t r i b u ­tor is earning or not . . . I n social insurance, on the other hand, contr ibut ions are required of employees only when wages are being earned. Social insurance, unlike v o l u n t a r y insurance, gives to these contr ibutors an addi t ional benefit of remission of substantial contr ibut ions when, for any reason, they are not i n receipt of earnings." Sir W i l l i a m believes t h a t the proposed c o n t r i b u ­

t i on scale wou ld n o t be excessive for any appre­ciable number of insured persons.

One-half or more of the t o t a l costs of the p l a n would be borne b y the N a t i o n a l Exchequer and local tax funds—50 percent i n 1945, 55 percent i n 1955, and 61 percent i n 1965. Interest o n investment of existing t rus t funds is estimated as 2 percent of the t o t a l throughout the period. The insurance contr ibutions of insured persons and e m p l o y e r s would represent declining proportions of costs, decreasing f r om 28 percent derived f r o m insured persons i n 1945 to 22 percent i n 1965, and f r o m 20 percent derived f r o m employers in 1945 to 15 percent i n 1965 (table 7) .

Allocation of Expenditures T h e report points o u t also t h a t some of the

proposed expenditures w h i c h would be borne who l ly or ma in ly b y the Exchequer are for p u r ­poses h i ther to the accepted responsibilities of insured individuals , such as support of chi ldren and the provision of medical care for dependents. Shi f t ing such responsibilities f r om the cit izen as consumer to the citizen as taxpayer, i t m a y be argued, m i g h t lead to extravagance. The m a i n burden on the Government would come 20 years hence i n provision for the large and growing p r o ­por t i on of aged persons. " T h a t is a burden w h i c h cannot be escaped; the facts are inexorable; the older people w i l l be hero and w i l l be m a i n t a i n e d — if no t by pensions i n their own r i g h t , then a t the cost of their i n d i v i d u a l families, by char i ty , or by pensions subject to a means test. The p lan of this report ensures t h a t this inevitable burden shall be foreseen and shall be made as l i g h t as possible, b y encouraging those who can w o r k t o go on work ing , and shall be borne fa i r l y b y the c o m m u n i t y as a whole . "

I n the actuarial allocation of insurance c o n t r i b u ­tions for adu l t class I workers, i . e., employed persons, the Exchequer would bear one - th ird of the costs of unemployment benefits and one-sixth of other benefits, except marriage and funeral grants, the costs of which would be met solely f r om contr ibutions of insured persons. E m ­ployers and insured persons wou ld share equal ly i n meeting five-sixths of the expenditures for a l l weekly benefits except unemployment benefits, for which each would finance one- th ird . These a l lo ­cations include administrat ive costs and an ac tu ­arial marg in .

Table 9 .—Great Britain: Actuarial allocation of weekly contribution rates for adults in class I to employee and employer

Program

M e n Women Program

T o t a l E m ­ployee

E m ­ployer T o t a l E m ­

ployee E m ­

ployer

A m o u n t i n pence

Proposed total con­t r i b u t i o n 90.0 51.0 39.0 72.0 42.0 30.0

C o n t r i b u t i o n : Benefits and adminis ­

t r a t i o n 79.7 41.3 38.4 64.1 31. 1 30.0 H e a l t h services 10.0 8.5 1.5 8.0 6.5 1.5

Margin 1 .3 1.2 - . 9 - . 1 1.4 - 1 . 5

A m o u n t in dollars 2

Proposed tota l con­t r i b u t i o n 1.51 0.86 0.66 1.21 0.71 0.50

C o n t r i b u t i o n : Benefits and adminis ­

t ra t i on 1.34 .69 .65 1.08 .57 .50 H e a l t h services .17 .14 .03 .13 .11 .03

M a r g i n 1 .03 - . 0 2 .03 - . 0 3

1 Represents difference between to ta l c on t r ibut i on and amount allocated to benefit cost.

2 Dollars computed at official exchange rate of $4.035 per pound sterl ing stabilized on M a r . 25, 1940. Totals may differ from sums of amounts because, i n convert ing to dollars, amounts were not forced to add to totals .

Source: Beveridge Report , p. 188.

T h e proposed contr ibut ions include, for all classes, a c ont r ibut i on t oward the costs of hea l th services, v a r y i n g f r om 10d. (17 cents) a week for an adu l t m a n and 8d. (13 cents) for an adu l t woman to 6d. (10 cents) for young persons aged 16-17. The allocation of the t o t a l contr ibut ions of a d u l t insured workers and their employers for social insurance benefits, heal th services, and marg in are shown i n table 9, and for contr ibut ions of a l l insured persons i n classes I , I I , and I V i n table 10.

The Value of Social Security to Contributors I n answering the question whether social

security is w o r t h i t s money price, Sir W i l l i a m says, i n p a r t : " F o r the insured person the answer is clear. T h e capacity and the desire of B r i t i s h people to contr ibute for security are among the most certain and most impressive social facts of t oday . They are shown i n the phenomenal g r o w t h bo th of indust r ia l assurance and of hospital c o n t r i b u t o r y schemes . . . On every occasion the pressure has been to come i n t o insurance rather t h a n to keep out , and to get higher benefits rather t h a n to pay lower contr ibut ions . . . The popu­l a r i t y of compulsory social insurance today is established, and for good reason; by compulsory

Table 10.—Great Britain: Actuarial allocation of weekly contribution rates for classes I , I I , and IV

Class and program

M e n aged— W o m e n aged—

Class and program 21 and over

18-20 16-17 21

and over

18-20 16-17

A m o u n t in pence Class I :

Proposed tota l contr ibut ion 90.0 75.0 60.0 72.0 60.0 48.0 Benefits and adminis t rat ion 79.7 66.4 53.1 64.1 53.4 42.7 Hea l th services 10.0 8.0 6.0 8.0 6.0 6.0

Margin 1 .3 .6 . 9 - . 1 .6 - . 7 Class I I :

Proposed tota l c ontr ibut i on 51.0 42.0 24.0 45.0 36.0 24.0 Benefits and admin is t rat i on 40.5 33.7 27.0 37.1 30.9 24.7 Hea l th services 10.0 8.0 6.0 8.0 6.0 6.0

Margin 1 .5 .3 - 9 . 0 - . 1 - . 9 - 6 . 7 Class I V :

Proposed total contr ibut ion 45.0 36.0 18.0 36.0 30.0 18.0 Benefits and adminis trat ion 33.7 28.1 22.5 26.8 22.3 17.9

Health services 10.0 8.0 6.0 8.0 6.0 6.0 Margin 1 1.3 - . 1 -10.5 1.2 1.7 -5.9

A m o u n t in dollars 2

Class I : Proposed total contr ibut ion 1.51 1.26 1.01 1.21 1.01 0.81

Benefits and administrat ion 1.34 1.12 .89 1.08 .90 .72 Heal th services .17 .13 .10 .13 .10 .10 Margin 1 .01 .02 .01 -.01

Class I I : Proposed total contr ibut ion .86 .71 .40 .76 .61 .40

Benefits and adminis trat ion .68 .57 .45 .62 .52 .42 Health services .17 .13 .10 .13 .10 .10 Margin 1 .01 .01 - . 1 5 .01 - . 0 1 - . 1 2 Class I V :

Proposed total contr ibut ion .76 .61 .30 .61 .50 .30 Benefits and adminis t rat ion .57 .47 .38 .45 .37 .30

Health services .17 .13 .10 .13 .10 .10 Margin 1 .02 .01 - . 1 8 .03 .03 - . 1 0

1 Represents difference between total c ontr ibut i on and amount allocated to benefit cost.

2 Dollars computed at official exchange rate of $4.035 per pound sterl ing stabilized on M a r . 25, 1940. Totals may differ from sums of amounts be­cause, in convert ing to dollars, amounts were not forced to add to totals.

Source: Beveridge Report , p. 189.

insurance, so long as i t is confined to meeting essential needs, the ind iv idua l can feel assured t h a t those needs w i l l be met w i t h the m i n i m u m of adminis trat ive cost; by paying . . . a substantial par t . . . as a cont r ibut i on , he can feel t h a t he is ge t t ing security not as a char i ty b u t as a r i g h t .

" F o r the employer, the answer should also be clear. W h a t he pays as insurance contr ibut i on is p a r t of the cost of his l a b o u r — f r o m his po int of view an addi t ion to wages. A t whatever reason­able po int the employer's insurance c ont r ibut i on is fixed, i t is a small par t of his t o ta l b i l l for labour and of his costs of product i on ; i t is the sign of an interest which he should feel and does feel i n the men whoso work comes under his c o n t r o l . " The Government bears costs which are the inevitable burden of citizens as taxpayers or as consumers, a burden which cannot be escaped. T h e proposed social security budget presents figures large i n comparison w i t h budgets for previous years, b u t not large i n relat ion to national income. The

plan for social security " i s only a means of re­d i s t r ibut ing nat ional income, so as to meet openly needs which must be met i n one way or another . "

B a s i s a n d C h a r a c t e r of Proposed Changes

M a j o r particulars of the recommendations on coverage, benefits, grants, allowances, and social services are outl ined i n the fo l lowing pages w i t h special reference to the changes proposed i n exist­ing provisions. I t must be emphasized, however, that a brief review cannot do justice to the wealth of in format ion and analysis contained i n this epochal report . For the philosophy of social security there outl ined by Sir W i l l i a m , the de­tails of part icular proposals, and the i m p o r t a n t record of existing provisions i n Great B r i t a i n , the reader is urged to consult the original document.

Of the 23 specific changes i n existing systems of social insurance and allied services proposed i n the report , 4 relate to insurance coverage, 8 are concerned w i t h the character, levels, or dura t i on of insurance benefits, and the remaining 11 recom­mend modifications of administrat ion to provide a unified program. Three other substantive recom­mendations deal w i t h the content and place of public assistance, children's allowances, and health and rehabi l i tat ion services in the unified plan for social security.

Insurance Coverage

Housewives.—One of the most significant pro ­posals is the "recogni t ion of housewives as a dist inct insurance class of occupied persons w i t h benefits adjusted to their special needs." Pro ­posals to meet such special needs include a mar ­riage grant based on contr ibutions as an insured person before marriage (though i t is indicated t h a t this proposal m i g h t be subject to postponement or discard w i t h o u t mater ia l effect upon the plan as a whole ) ; a m a t e r n i t y g r a n t ; widowhood and separation provisions and ret irement pensions; benefits dur ing the husband's unemployment and disabi l i ty i f the wife is not gainful ly occupied; and if the housewife is gainful ly occupied special matern i ty benefit i n add i t i on to the m a t e r n i t y grant and, i f she elects to contr ibute , somewhat lower than standard unemployment and dis­ab i l i ty benefits i n her own r i g h t . These recom­mendations include the abol i t ion of the existing Anomalies Regulations for M a r r i e d Women, wh i ch

wore imposed to prevent the use of unemploy­ment benefits to subsidize women who w i t h d r e w from the labor m a r k e t on marriage w i t h no intent ion of reentering covered employment. Under the existing unemployment insurance system, the housewife is recognized as an adu l t dependent of her husband, and his unemployment benefit is increased on her behalf; i n heal th insurance she is not recognized a t a l l , except dur ing m a t e r n i t y .

" I n any measure of social pol icy i n wh i ch regard is had to facts , " the report declares, " t h e great m a j o r i t y of marr ied women must be regarded as occupied on w o r k whi ch is v i t a l though unpaid , w i t h o u t wh i ch their husbands could no t do their paid w o r k and w i t h o u t wh i ch the nat ion could not cont inue . " T h e social security p lan treats m a n and wife as a team b y m a k i n g the standard rate of a l l benefits t h a t for a m a n and wife , subject to reduct ion i f there is no wi fe or i f the wife is also ga in fu l ly occupied, and b y t r e a t ­ing a man's contr ibut ions as made on behalf of himself and his wife as two equally essential members of a team. M o s t marr ied women have worked a t some gainful occupation before m a r ­riage, and most who have done so give up t h a t occupation on marriage or short ly thereafter.

" O n marriage a woman gains a legal r i g h t to maintenance by her husband as a f irst line of de-fense against risks which fa l l d irect ly on the sol itary woman ; she undertakes at the same t ime to perform v i t a l unpaid service and becomes ex­posed to new risks, inc luding the r isk t h a t her marr ied life m a y be ended prematurely b y w idow­hood or separation. . . Moreover, oven i f a marr ied woman, while l i v i n g w i t h her husband, undertakes gainful occupation, whether b y em­ployment or otherwise, she does so under condi­tions dist inguishing her f rom the single woman i n two ways. F i r s t , her earning is l iable to i n t e r r u p ­t i on b y c h i l d b i r t h . . . I n the nat ional interest. . . the expectant mother should be under no economic pressure to continue at w o r k as long as she can, and to r e t u r n to i t as soon as she can. Second, to most marr ied women earnings b y a gainful occupation do not mean w h a t such earnings mean to most sol i tary women. Unless there are c h i l ­dren, the housewife's earnings i n general are a means, not of subsistence b u t of a standard of l i v i n g above subsistence. . . I n sickness or u n ­employment, the housewife does not need compen-

sating benefits on the same scale as the sol itary woman because, among other things, her home is prov ided for her either b y her husband's earnings or benefit i f his earning is i n t e r r u p t e d . "

Under the Beveridge p lan a woman, on marriage, begins a new l i fe i n re lat ion to social insurance b y acquiring a housewife's pol icy endorsed on or attached to her previous employment card, occu­pat i on card, or security card, depending upon her pr i o r occupational status. She forfeits r ights t o unemployment or d isabi l i ty benefits acquired b y contr ibutions before marriage. I f she engages i n employment or other gainful occupation, she m a y elect to remain exempt f r om social insurance contr ibut ions and ineligible for unemployment and d isabi l i ty benefits i n her own r i g h t or m a y con­t r i b u t e , and thereby requal i fy for unemployment and d isabi l i ty benefits at two- th i rds of the normal single-person rate. I f ga inful ly occupied, whether she claims exemption or decides to contr ibute , she would receive, on g iv ing up earnings for the period of c h i l d b i r t h , b o t h the m a t e r n i t y grant available for a l l marr ied women and m a t e r n i t y benefit for 13 weeks at a rate above the normal rate of unem­p loyment and d isab i l i ty benefit for men and single women. " T a k e n as a whole, the p lan for social security puts a p r e m i u m on marriage, i n place of penalizing i t . "

Self-employed persons.—Persons w o r k i n g on their own account (class I I ) wou ld be covered b y the old-age ret irement program through contr ibut ions to the social insurance fund . These contr ibut ions wou ld be approximately the same as those of e m ­ployed persons and would no t equal the combined employer and employee shares. M a n y independ­ent workers, such as smal l shopkeepers, are poorer t h a n m a n y of those employed under contract of service and are equally dependent on good health for the i r income. However , short - t ime d isabi l i ty of self-employed persons is di f f icult to prove and may n o t seriously i n t e r r u p t earnings, and since many persons w o r k i n g on the ir own account have l i m i t e d means and cannot afford the f u l l c ontr ibut i on paid b y employers and employees i n class I , i t is pro ­posed t h a t d isabi l i ty benefits for class I I be l i m i t e d to d isabi l i ty wh i ch lasts more t h a n 13 weeks. Certa in groups, such as homo workers, share fishermen, and small contractors, who are included i n the existing health insurance program, would probably be placed i n class I I and would not be compulsori ly insured against the first 13 weeks of

sickness; they would be eligible, however, for higher t h a n present benefits for prolonged dis­a b i l i t y . Self-employed persons would also be eligible for a t ra in ing benefit equivalent to the unemployment benefit, i f they desired to learn a new trade.

Nongainfully occupied persons.—A major change i n coverage, i n add i t i on to the extension of insurance against old-age and prolonged d isab i l i ty to a l l ga inful ly occupied persons, is extension of old-age insurance coverage to a l l persons of w o r k ­ing age, whether or not gainful ly occupied. I t is held t h a t a l l persons, even i f no t gainful ly occupied throughout their w o r k i n g lives, should be assured subsistence income when they are too o ld to w o r k and should obta in t h a t income through contr ibut ions paid dur ing their adu l t years. Insurance against d i sab i l i ty , on the other hand , is proposed only for gainful ly occupied persons. Persons of w o r k i n g age who are not gainful ly occupied (class I V ) would also insure for t ra in ing benefit through contr ibut ions on their security cards.

The group of nongainful ly occupied persons includes a few who, through i n f i r m i t y , are per­manent ly incapable of work , and a few who, because of pr ivate means, may never need to w o r k ; a much larger number w i l l be engaged i n gainful work at a later stage in their lives (for example, students over age 1G), and many may alternate between work ing for pay and g iv ing unpaid services other than as housewives, such as daughters who are looking after parents. "Such persons . . . cannot count on continuance of their support throughout life . . . I f they lose their unpaid l ivel ihood . . . while they are of w o r k i n g age, they w i l l be able to obta in t ra in ing benefit as a means of passage to other l ivelihoods. T h e y need to be assured of pensions for their o ld age. Those who work i n employment al l their lives w i l l pay contr ibut ions for ret irement pensions throughout ; i t is contrary to insurance principle t h a t others who equally need pensions should contr ibute only in p a r t of their lives, or should be able, as at present, to make factit ious contracts of employment late i n l i fe w i t h a view to securing pensions a t m i n i m u m cost ."

Removal of existing exemptions.—The t h i r d i m ­p o r t a n t change i n coverage proposed i n the social security p lan is the abol i t ion of existing exceptions f r om insurance coverage, i . e., persons

receiving more t h a n £420 ($1,695) a year f r om employment i n nonmanual occupations; per­sons i n government service, nat ional and loca l ; policemen; nurses; rai lroad employees; and indoor domestic servants i n pr ivate homes. N e a r l y a l l such persons have h i ther to been excluded f r om unemployment insurance, b u t only the higher-paid nonmanual workers have boon excluded from other types of compulsory social insurance protection. " T h e view taken here is t h a t , as regards unemployment , a l l industries should stand together," bo th those which have small r isk of unemployment as wel l as those which c la im to have no unemployment risks. Dist inct ions among industries, i t is pointed out , load to di f f i cult demarcation problems. I f there are any occupa­tions which have already made provisions for o ld -age ret irement and disabi l i ty insurance, " t h e y should do so i n future i n the l i g h t of the basic provision being made for a l l , inc luding their members, by the nat ional p lan for social secur i ty . "

This proposal would mean a substantial increase in employee and employer contr ibut ions toward social security-—proportionately a greater increase than for other classes. Since the f u l l rate of old-age ret irement benefits would not be reached u n t i l the end of the 20-year transi t ion period, there would be t ime to readjust the special plans for ret irement pensions and, i f employers and employees desire, to reduce the contr ibutions now payable under these special plans.

Abo l i t i on of present salary l imi t s for coverage of nonmanual workers is urged on the ground of injustice i n exempting h ighly paid persons f r o m compulsory contr ibutions required of lower-paid employees i n the same occupations; i t avoids the present complicated and unsatisfactory devices for cont inuat ion of coverage on a vo luntary basis when persons are exempted f r om coverage i n middle life or afterwards because their salaries exceed the compulsory level ; i t puts an end to troublesome questions of defining nonmanual work and rates of pay i n seasonal ( f luctuating) occupations; and i t removes such anomalies as now exist w i t h identical income l imi ta t i ons for single men and heads of families.

Comprehensiveness of coverage.—With these ex­tensions of coverage, the social security plan proposed for Great B r i t a i n encompasses the entire populat ion, assuring, as a matter of r i g h t for those who meet the contr ibutory quali f ications: sub­

sistence payments i n the f o r m of universal old-age ret irement pensions; unemployment benefits for a l l who suffer income loss through unemployment ; d isabi l i ty benefits for a l l whose earnings are i n t e r ­r u p t e d through periods of prolonged illness (more t h a n 13 weeks) and for a l l employees who suffer such i n t e r r u p t i o n through illness of more t h a n 3 days' d u r a t i o n ; t ra in ing benefits for a l l persons of w o r k i n g age (except class I workers) who need to acquire skills for a gainful occupation; funeral grants w i t h respect to every person who dies; pensions to widows, or guardians of small chi ldren deprived of parental support ; special marriage grants, m a t e r n i t y grants, and separation benefits for a l l marr ied women and m a t e r n i t y benefits for mothers who are gainful ly employed; and special allowances for adul t dependents other t h a n wives.

Benefits for Unemployment, Training, and Disability

Sir W i l l i a m places a l l benefits for income loss a t u n i f o r m levels, i . e., the subsistence cost for a w o r k i n g man and his wife and for single workers, classified b y sex and age group. " U n i f o r m i t y , " he says, "has the advantage of g iv ing no m o t i v e to the insured person to c la im one f o r m of benefit rather t h a n another (say unemployment rather t h a n disabi l i ty ) because i t is higher and n o t because i t real ly fits his case." Moreover, a l l forms of compensation for current wage loss w o u l d have u n i f o r m provisions for quali f ication, w a i t i n g period, and benefit dura t i on . Under the existing social insurance programs there is wide v a r i a t i o n among these provisions; d i sab i l i ty benefits are lower for prolonged t h a n for temporary d isab i l i ty , and unemployment benefits are higher t h a n either, despite the fact t h a t the sick person needs more income t h a n the able-bodied unemployed m a n , for special food or a t tent ion . I n prolonged i n t e r r u p t i o n of earnings, moreover, " income needs tend to increase rather than to decrease; the other means a t the disposal of the insured person become exhausted; expenditures on c lothing and equip­ment which he m a y have been able to postpone become unavoidable, since they cannot be post­poned indef inite ly . Measures other t h a n the pro ­vision of income become increasingly necessary, to prevent deterioration of morale and to en­courage recovery."

T o correct these deficiencies i n existing p r o ­grams, the p lan proposes u n i f o r m subsistence

benefits for unemployment , t ra in ing , and n o n -industr ia l d isabi l i ty , payable to a l l qualified persons after a 3-day w a i t i n g period, for wh i ch payments w o u l d be made retroact ively i f the durat i on of the income loss is 4 weeks or more. N o means test is imposed for any of these benefits, and durat i on is u n l i m i t e d except for t r a i n i n g bene­fits and certain l imi ta t i ons w h i c h wou ld be ap­pl ied for persons above w o r k i n g age who m i g h t be eligible for old-age ret i rement benefits. Cer­t a i n requirements for accepting offers of suitable w o r k or a t tending a t r a i n i n g course w o u l d be imposed, however, for continued receipt of u n ­employment benefits after 26 weeks i n normal cases, and d isab i l i ty benefits w o u l d be condi ­t i ona l on the beneficiary's willingness to coop­erate i n rehab i l i ta t i on measures i f bis w o r k i n g capacity could be restored or improved thereby. The t ra in ing benefit wou ld n o r m a l l y be l i m i t e d to 26 weeks and would be restricted to persons in classes ineligible for unemployment benefits in the i r own r i g h t , i . e., ga in fu l ly occupied persons (other t h a n employees), housewives, and nongain­f u l l y occupied persons of w o r k i n g age (classes I I , I I I , and I V ) . Subject to regulations, provision would be made also for grants, by way of loan or otherwise, to meet, i n whole or par t , expenses for t ransportat ion and temporary lodging for persons t a k i n g t r a i n i n g courses at a distance f r om home. These grants would be available also for unem­ployed persons i n class I who take jobs away f r o m home.

Dependents ' allowances would be payable to single persons i n receipt of benefits for unemploy­ment , t ra in ing , or d isabi l i ty , i f they have l i v i n g w i t h them a nongainful ly occupied dependent above the age for children's allowances.

T h e benefit year for al l benefits would comprise 12 months beginning w i t h the first of October, and r ights to f u l l benefits, grants, and allowances for unemployment , t ra in ing , and d isabi l i ty would require 48 weekly contr ibut ions paid or excused i n the preceding cont r ibut i on year ending i n J u l y . F o r a housewife, the re levant contr ibut ions would be those of her husband. T h e report points out t h a t on ly a few persons dependent on earnings would be disqualified by the c ont r ibut i on require­ment , e. g., seasonal workers or others who take w o r k on ly occasionally and who are not c o n t i n u ­ously available for work . For persons who fa i l to meet the f u l l qualif ications, benefits, reduced

i n amount or durat ion , would be determined by regulations. When the program is i n f u l l opera­t i on , there would be an i n i t i a l qua l i fy ing condit ion of 26 actual contr ibut ions , and the durat i on of nonindustr ia l d isabi l i ty benefits wou ld be l i m i t e d to 52 weeks unless the insured person has paid 156 actual contr ibut ions .

The report points out t h a t the correlative of adequate benefits paid b y the Government for unavoidable i n t e r r u p t i o n of earnings, however long, is "enforcement of the citizen's obl igation to seek and accept a l l reasonable opportunit ies of work , to cooperate i n measures designed to save h i m f r om hab i tuat i on to idleness, and to take al l proper measures to be well . The higher the bene­fits provided ou t of a common fund for unmerited misfortune, the higher must be the citizen's sense of obl igat ion no t to draw upon t h a t fund unneces­s a r i l y . "

Thus , (1) persons i n receipt of unemployment benefits cannot be allowed to hold out indef initely for the typo of work to which they are accustomed or for work i n their present places of residence i f other work whi ch they could do is available at standard wages for t h a t w o r k ; (2) to prevent unnecessary idleness and, inc idental ly , to unmask the re lat ive ly few persons who may be suspected of malingering, who have perhaps some concealed means of earning, unemployed workers should be required to at tend work or t ra in ing centers to improve their earning capacity ; (3) present meas­ures for control of claims to d i s a b i l i t y — b o t h by certi f ication and sick v i s i t i n g — w i l l need to be strengthened; (4) special a t tent ion must be paid to the prevention of chronic d isabi l i ty , by advice and supervision of cases in which i t is threatened and by research in to its causes; (5) requirements for benefit e l ig ib i l i ty must be enforced when necessary by suitable penalties.

I n this f ramework, the social security p lan would offer a marr ied man w i t h a nongainful ly occupied wife and no children or other depend­ents unemployment benefits of 40s. ($8.07) a week, one- th ird higher than under the existing program and for u n l i m i t e d periods, w i t h o u t a means test, i n contrast to 26 weeks—the present l i m i t on d u r a t i o n of insurance payments. For agr icu l tura l workers the increase i n benefits wou ld be even greater, because the existing pro ­gram for agriculture provides lower rates of u n ­employment benefit for these workers while the

proposed p lan makes no such d is t inct ion . For short-term disabi l i ty the benefits for a marr ied man w i t h a nongainful ly occupied wife wou ld be more t h a n doubled—40s. ($8.07) a week instead of 18s. ($3.63)—and there wou ld be no transfer to a lower disablement rate—-now 10s. 6d. ($2.12) a week i f the d isabi l i ty extended beyond 26 weeks. Benefits for other age groups would be lower for single than for marr ied persons and lower for women than for men, as is now the case, b u t i n all instances they would be higher t h a n present levels and, under conditions adapted to various modes of gainful work , would establish protec­tion against current risks of income loss for the entire B r i t i s h populat ion of work ing age.

Special Pensions for Prolonged Industrial Dis­ability

Disab i l i ty of industr ia l or ig in poses special questions. The social security plan proposed by Sir W i l l i a m advocates the abol i t ion and replace­ment of the present system of workmen's com­pensation by including provisions for industr ia l accident and disease w i t h i n the unified social i n ­surance program, subject to a special method of meeting costs, special pensions for prolonged disabi l i ty , and grants to dependents i n cases of death.

The existing system of workmen's compensation was introduced i n l imi ted f orm i n 1897 and made general i n 1906. The report points out t h a t a l ­though the system has conferred great benefits i n the past i t has many disadvantages: (1) i t rests in the last resort upon the threat of l i t i g a t i o n or on formal legal proceedings; (2) i t provides no machinery for aiding workers i n presenting their claims, and workers feel, r i g h t l y or wrongly , under pressure to reduce claims, accept unfair lump-sum settlements, or go back to unsuitable l i g h t work for which they are not ready; (3) i t affords no absolute assurance of payment , since employers, except those i n min ing , are not compelled to insure; (4) i t fails to assure maintenance of neces­sary income, since, part i cu lar ly i n cases of per­manent or prolonged d isabi l i ty , the workers agree to accept l u m p sums which prove inadequate or are injudic iously expended to meet pressing, b u t temporary, needs, and i n process of bargaining for such l u m p sums the workers are afraid to prejudice their positions by a t t e m p t i n g to get well or by tak ing any k i n d of w o r k ; (5) i t entails

inevitable demarcation disputes when compensa­t ion has to be provided f r o m different funds b y different author i t ies ; (6) i t embodies principles for defining dependents which differ f r o m those of existing unemployment insurance and pension programs; (7) i t s administrat ive costs are unneces­sarily h igh—ranging f rom 45 percent of the pre­miums paid to insurance companies to 7 percent of the premiums paid to some of the m u t u a l indemni ty associations i n coal m i n i n g , n o t i n ­c luding substantial costs incurred b y some workers i n presenting claims—since methods of negotia­t i o n of claims and l i t i ga t i on are inev i tab ly more expensive t h a n procedures for determining claims b y administrat ive a u t h o r i t y subject to appeals to special t r ibuna ls ; (8) i t provides no assurance of compensation for d isabi l i ty arising f r o m an indus­t r i a l disease whi ch is gradual i n onset, since employees w i t h symptoms of such disease m a y be discharged and since difficulties m a y arise i n trac­ing i t s or ig in to any one of successive employ­ments ; (9) i t contributes " l i t t l e or no th ing to the most i m p o r t a n t purpose of a l l , wh i ch should have come f irst , namely, restoration of the in jured em­ployee to the greatest possible degree of produc­t i on and earning as soon as possible," since— except for workers w i t h no dependents who become to ta l l y disabled or d i e — i t makes no provision for medical, hospital , or rehabi l i tat ion services other t h a n the medical t reatment available under national health insurance.

Workmen 's compensation, the "pioneer system of social security i n B r i t a i n , " the report says, "was based on a wrong principle and has been d o m i ­nated by a wrong out look. I t allows claims to be settled by bargaining between unequal parties, permits payment of socially wasteful l u m p sums instead of pensions i n cases of serious incapacity , places the cost of medical care on the w o r k m a n or char i ty or poor relief, and over p a r t of the field, large i n the numbers covered, though not i n the proport ion of the t o t a l compensation paid , i t relies on expensive pr ivate insurance."

I n view of the fact t h a t the needs of disabled workers and families of workers who are k i l l ed are the same regardless of the cause of the worker 's d isabi l i ty or death, i t m a y be argued t h a t the flat rate of compensation adopted under the p lan for other forms of income in te r rupt i on should also be applied w i t h o u t reserve or quali f ication to indus­t r i a l accident and disease. Arguments can be

advanced, however, for m a k i n g a d is t inct ion , since some occupations are especially dangerous, since persons disabled i n industry have been w o r k i n g under orders, and since employers are cur­r e n t l y l iable a t common law. For death or pro ­longed d isabi l i ty , according to the report , the reasons for dist inguishing accident and disease of industr ia l or ig in f r o m such contingencies duo to other causes outweigh those for complete u n i f o r m ­i t y of t reatment .

T h e social security plan proposes, therefore, to t reat the f irst 13 weeks of industr ia l d isabi l i ty l ike any other f o rm of d isabi l i ty and to abandon the existing separate system of workmen's com­pensation. I f d isabi l i ty duo to industr ia l accident or disease lasts more t h a n 13 weeks, benefits a t a flat rate would be replaced by an industr ia l pension related to the average earnings of the disabled worker and continued as long as d isabi l i ty lasts. F o r to ta l d isabi l i ty the pension would represent two - th i rds of the fu l l - t ime earnings of the worker , subject to a m i n i m u m equal to his d isabi l i ty bene­fit, inc luding dependent's allowance, i f any, and a m a x i m u m of £3 ($12.10) a week. For par t ia l dis­a b i l i t y , the industr ia l pension would be related to loss of earning capacity. I f death results f rom i n ­dustr ia l accident or disease, industr ia l grants would be payable on behalf of the widow, i f any, and persons who l ly or ma in ly dependent on the de­ceased. Regulations would determine the amount of such grants and their relat ion to the widows ' and guardians ' benefits and funeral grants .

These special payments would be financed i n p a r t f r o m payments of insured persons i n class I and their employers, i n p a r t f rom the Exchequer, and i n p a r t f r o m special levies on employers, w i t h adjustments a t the outset of the program for l iabi l i t ies already incurred by employers or the ir insurers. I n d u s t r i a l pensions would no t be payable w i t h respect to d isabi l i ty arising after pensionable age, b u t i f granted before t h a t age would continue for life i n place of the c o n t r i b u ­t o r y old-age insurance benefit i f i t exceeded the la t t e r . A worker receiving an industr ia l pension for p a r t i a l d isabi l i ty would be permit ted to w o r k ; should he suffer unemployment or illness he could qual i fy for unemployment or d isabi l i ty benefits and receive such benefits and the industr ia l pen­sion simultaneously. N o cont r ibutory conditions would be imposed for any benefit, pension, or g r a n t w i t h respect to d isab i l i ty or death arising

f r o m industr ia l accident or disease; r ights to such payment would depend solely on whether or not the contingency arose out of and in the course of employment under contract of service.

The integrat ion of provisions for industr ia l acci­dent and disease w i t h the social security plan would require, in add i t i on to the changes already out l ined : (1) abol i t ion of the existing remunera­t i o n l i m i t on coverage for nonmanual workers ; (2) restr ict ion of lump-sum payments for dis­a b i l i t y to cases i n which the social security office is satisfied t h a t such a payment is i n the employee's interest ; (3) dealing w i t h claims by adminis tra ­t ive , rather t h a n legal, procedure w i t h provision for appeals b y employees, employers, or the ir associations to special local tr ibunals of three members; (4) review of the law of employers' l i a b i l i t y i n view of improved provisions for i n ­dustr ia l accident or disease; (5) establishment of s ta tutory associations of employers and employees i n industries classed as hazardous to promote safety and measures for rehabi l i tat ion and reem­ployment , to advise in f ormulat ion of regulations, to collect special employer levies toward financing the program, and to establish systems to supple­ment benefits under the proposed program.

Old-Age Retirement Benefits Unl ike the existing program for contr ibutory

old-age pensions, the social security plan proposes to make old-age benefits condit ional on ret i re ­ment f rom work , w i t h provision for an increase in amount of benefits for each year of postponed ret irement . These proposals arc made (1) as a logical consequence of g iv ing adequate amounts, (2) as an incentive for the ind iv idua l to continue at w o r k as long as he can, instead of r e t i r i n g , i n order to l ighten the burden t h a t would other­wise fa l l on the c o m m u n i t y through the large and growing proport ion of people at the higher ages, and (3) as a recognition of the fact t h a t the age to which men can go on w o r k i n g w i t h satisfaction to themselves and advantage to the c o m m u n i t y varies w i t h indiv iduals and w i t h occupations. "Adequate pensions w i t h a flexible age of re t i re ­ment w i l l increase happiness and weal th i n many ways. E a r l y ret irement of men on pension is no t wanted or useful as a cure for unemployment . " On the contrary , there should be as few idle con­sumers as possible a t any age after childhood is past. T w o reservations to this statement must

be recognized, however: f irst , t h a t i n some occu­pations, such as service i n the armed forces, early retirement and pensions are needed; and second, that the possibil ity of early ret irement is a means of adjust ing labor supply to f luctuations i n demand.

A person who continues gainful w o r k after reaching the ret irement age would continue to contribute to the social security fund at rates applicable to his class. For each such c o n t r i b u ­tion year, the basic pension would be increased by Is . (20 cents) a week for a single person and 2s. (40 cents) a week for a couple. The worker, unt i l he retires, wou ld be able to obta in unem­ployment or d isabi l i ty benefits, for perhaps a maximum of 20 weeks i n a benefit year. I f a person who has ret ired on pension thereafter undertakes paid work i n employment or other­wise, the amount of his pension i n any 3 months would be reduced b y a proport ion of his earnings in a previous 3-month period. I f a person i n class I V defers c la iming the pension for which ho is eligible and continues to contr ibute , his pension would be increased as for gainful workers.

The p lan for social security proposes a basic pension of 40s. ($8.07) a week for a ret ired man aged 65 or over w i t h a nongainful ly occupied wife, regardless of her age. Should she die, his pension would be t h a t of a single man. For a single man aged G5 or over and for a single woman aged GO or over, the basic pension would be 24s. ($4.84) a week. These basic rates of payment , however, would be lower d u r i n g a 20-year transi t ional period, b u t even the reduced rales would be higher than under the existing program. For persons now receiving contr ibutory pensions or c on t r ibut ­ing to the existing pension plan, the benefits i n the first year (1944-45) wou ld s tar t at 25s. ($5.04) a week for a marr ied couple (representing a 25-percent increase over the existing rate) and at 14s. ($2.82) a week for a single person (a 40-perccnt increase over present levels). The benefits w o u l d rise to 32s. 6d. ($6.56) a week for a marr ied couple and to 19s. ($3.83) a week for a single person i n 1954-55, plus, i n each case, any weekly increase payable for postponed ret irement .

For a person to qual i fy for f u l l ret irement benefits, his c ont r ibut i on record would have to show an average of not less t h a n 48 contr ibut ions paid or waived throughout his w o r k i n g l i fe f r o m the beginning of the proposed insurance program.

I n general, ho would remain in full benefit status by certifying that he was not earning. Special qualifying conditions would apply during the 20-year transition period. F o r persons who are excluded from the existing contributory pension program, rates would be somewhat lower during the transitional period. Benefits for these newly covered groups would not be payable until the plan had been in operation for 10 years, and the increase for postponed retirement would not apply until after June 1954.

Great Britain is faced with a serious problem of old age. Persons of pensionable age represented an estimated 12.0 percent of the population in 1941 and may constitute, according to the report, 20.8 percent in 1971. T h e problem is dealt with at present by a threefold system of Government pensions: (1) contributory pensions of 10s. ($2.02) a week to men aged 65-70 and to women aged 60-70, payable without a means test and re­gardless of their continuance in employment, and for the most part limited to persons who have been employed; (2) noncontributory pen­sions of 10s. ($2.02) a week or less, payable to all persons aged 70 or over, subject to a means test unless they have been receiving a contributory pension; and (3) supplementary pensions payable to increase the amount of contributory or non-contributory pensions, subject to a means test different from that applied for receipt of non-contributory pensions. I n general, persons be-low age 70 may receive contributory and supple­mentary pensions only if they have been i n what the report terms class I . Such pensions are not generally available to persons who have never been gainfully occupied, to those who have worked on their own account, or to the wives or widows of such persons. A voluntary system of old-age insurance, established in 1937, has permitted persons outside the contributory sys­tem to qualify for pensions, but in the main the only public provision for the aged in these groups is public assistance administered by local authori­ties with their own tests of need.

The present contributory pensions, the report finds, " a r e manifestly inadequate, if there are no other resources; at the same time they are often superfluous, since they may be drawn by people still able to earn a full living. . . Any plan of social security worthy of its name must ensure that every citizen, fulfilling during his working life the

obl igation of service according to his powers, can c la im as of r i g h t when he is past work an income adequate to m a i n t a i n h i m . " A t the same t i m e , an adequate p lan must avoid "spending money which is urgent ly needed elsewhere or money on a scale throwing an intolerable f inancial burden on the c o m m u n i t y . " A n essential p a r t of the plan is a ret irement pension enough for subsistence whether or not the pensioner has other resources. Such subsistence pensions, however, would not be paid f rom the beginning of the plan to any persons past w o r k i n g age. F u l l subsistence payments wou ld be postponed to p e r m i t the nat ional econ­o m y to be b u i l t up again after the disturbance of war , to permi t ad justment of the great var ie ty of existing pension plans to the now p lan , and to al low for determinat ion of appropriate levels of subsistence benefits and pensions.

T h e proposed transi t ional period of 20 years w o u l d no t affect any man under age 45 or any single woman under age 40 a t the beginning of the social security p lan . Persons who are already i n receipt of c on t r ibutory pensions w i t h o u t re t i re ­ment conditions wou ld continue to receive their $2 a week as long as they like and would continue to w o r k and to contr ibute toward the new social security pensions. When they ret i red , they would receive pensions a t the appropriate level of the new scale. T h e same pr inc ip le of safeguarding existing pensioners would apply also to non -contr ibutory pensions and to certain other s i t ­uations.

I n brief , the p lan for old-age insurance calls for u n i f y i n g , under a M i n i s t r y of Social Security, admin is t rat ive provisions now divided among the M i n i s t r y of H e a l t h , the Depar tment of H e a l t h for Scotland, Customs and Excise, the Assistance B o a r d , and local publ ic assistance author i t ies ; for an increase i n pension rates for contr ibutors to the present old-age insurance program; for br ing ing i n t o coverage a l l persons of w o r k i n g age who are excluded f r om the existing contr ibutory system, and p e r m i t t i n g them to q u a l i f y — w h e n they meet the required condit ions—for substantial c ont r ibu ­t o r y pensions after 10 years and f u l l c ont r ibutory pensions after 20 years; for p e r m i t t i n g persons no t now eligible for noncontr ibutory pensions to ob­t a i n publ ic assistance on proof of need (see dis­cussion of nat ional assistance, be low) ; and for re ­placing b y a single test the several diverse tests of need which are now i n operation.

Survivor Pensions The Beveridge report proposes major changes

i n existing provisions for widows and orphans under the Widows ' , Orphans' , and O l d Age C o n t r i b u t o r y Pensions A c t of 1925, as amended i n 1929, 1937, and 1940. The report recommends replacing the existing inadequate uncondit ional widows' pensions b y provisions suited to the varied needs of widows—temporary benefits at a special rate i n a l l cases, t ra in ing benefits when required, and guardian benefits so long as there are dependent chi ldren.

According to the report , the uncondit ional benefit payable under the existing social insur­ance system is inadequate i n many cases and as superfluous i n others as is the uncondit ional contr ibutory old-age pension. " T h e r e is no reason w h y a childless widow should got a pen­sion for l i f e ; i f she is able to w ork , she should w o r k . On the other hand, provision much better t h a n at present should be made for those who , because they have the care of chi ldren, cannot w o r k for gain or cannot work regularly . . . H a v i n g regard to the prospective age const i tu ­t i on of the populat ion , the principle t h a t any person physically f i t for work should be ent i t led to retire f rom work upon pension before reaching the m i n i m u m pension age . . . cannot w i t h o u t grave danger be admit ted i n any scheme for social insurance." Under the social security plan, a widow who is t o ta l ly disabled at the t ime of her husband's death would get d isabi l i ty benefits; one who loses her husband through industr ia l accident or disease would get a special industr ia l pension or grant . "Permanent provision for widowhood as such, irrespective of the care of chi ldren and of need, is a mat ter for vo luntary insurance by the husband. "

I n addi t ion to a funeral grant , the plan pro ­poses the fo l lowing benefits for widows whose husbands had fu l l insurance status at the time of death, i . e., 48 contributions paid or waived i n the preceding contr ibut ion year: (1) a temporary benefit of 3Gs. ($7.26) a week, 50 percent higher t h a n the unemployment and d isabi l i ty benefits for a single adul t woman, payable for 13 weeks to allow t ime for the widow to adjust herself to now conditions; (2) a guardian's benefit, amount ing to 24s. ($4.84) a week, so long as the widow has young ch i ldren ; (3) a t ra in ing benefit of 24s. ($4.84) a week for a m a x i m u m of 26 weeks to per-

mit any widow to acquire or resume a gainful occupation. The guardian benefit i n a l l i n ­stances would be subject to par t ia l reduct ion for earnings i f the widow is gainful ly employed. I t would be supplemented w i t h o u t any such reduc­tion by an allowance, averaging 8s. ($1.61) a week, for each chi ld i n her care under age 15, or under age 16 i f a t tending school.

Widows whoso insurance benefits are too low, for any reason, to provide subsistence or who are unable to obta in paid w o r k for wh i ch they are capable would be able to obta in public assistance Widows who, on terminat ion of widow's benefit, are unable to take up w o r k on account of perma­nent d isabi l i ty would be eligible to have their pensions continued at the rate for d isabi l i ty bene­fit. A t age 60, the widow whoso husband has insurance status at the t ime of his death, regard­less of other conditions, would qual i fy for o ld -age benefits on ret irement from gainful work . The insurance status of a widow who remarries would be determined by her occupational category and the insurance status of her now husband. Pensions now paid to widows under the existing program would be continued at existing rates to age 60 unless the widow qualifies for higher rates of benefits under the new proposals for widows and guardians.

Maternity Under the existing system of social insurance i n

Great B r i t a i n a lump-sum m a t e r n i t y benefit of £2 ($8.07), which may be increased by addit ional grants, is payable to wives of a l l men covered by the contr ibutory health insurance program, and an additional payment of £2 is made to employed married women who are also covered by this pro ­gram in their own r ight . The social security plan proposes as a subst itute a m a t e r n i t y grant of £4 ($16.14) available to al l married women and to other women if insured in class I or I I , and, in addition, a m a t e r n i t y benefit of 36s. ($7.26) a week payable for 13 weeks, inc luding the date of the child's b i r t h , to all ga inful ly occupied women, whether they pay contr ibut ions or are exempt, but conditioned on discontinuance of gainful em­ployment d u r i n g the 13-week period. A l l women, whether gainful ly occupied or not , would also be entitled to medical care, m a t e r n i t y care, and nurs ­ing services as p a r t of the proposed comprehen­sive health program. " T h e m a t e r n i t y grant is not

intended to cover the whole cost of m a t e r n i t y , wh i ch has a reasonable and n a t u r a l c la im upon the husband's earnings. B u t i t should be raised m a ­ter ia l ly above its present figure. The m a t e r n i t y benefit is intended to make i t easy and a t t rac t ive for women to give up gainful occupation a t the time of m a t e r n i t y , and w i l l be a t a rate mater ia l ly higher [50 percent higher, as i n the case of widows ' temporary benefits] t h a n ordinary unemployment or d isabi l i ty benefits."

Special Marriage Needs The plan proposes, though i t does not envisage

the proposal as an indispensable p a r t of the pro ­jected program, a marriage grant a t a rate of £1 ($4.04) for each 40 actual social insurance con­tr ibut ions paid by a woman i n class I or I I pr ior to her marriage, up to a m a x i m u m grant of £10 ($40.35). I f the marriage grant is o m i t t e d f r om the program, the contr ibut ions of women i n these classes m i g h t be reduced, beginning w i t h age 18, by 3d. (5 cents) a week. " T h i s g r a n t , " the report states, " i s desirable b o t h as compensation for g i v ­ing up previous qualifications for benefit and having to requali fy i f she continues i n gainful occupation, and also i n order to obta in p r o m p t noti f icat ion of marriage. I t is . . . something t h a t m i g h t be omi t ted i f i t were thought necessary to reduce contr ibut ions . "

The plan proposes, also, special household help for housewives i n time of sickness, to be provided under the comprehensive heal th services when such help appears necessary to p e r m i t the house­wife to enter a hospital for effective medical t reatment .

I f marriage ends i n legal or vo luntary separa­t ion , divorce, or desertion, the housewife wou ld be ent i t led to the same insurance protect ion as for widowhood, "unless the marriage maintenance has ended through her f a u l t or v o l u n t a r y act ion w i t h o u t jus t cause." I f she is no t at f a u l t , "she should not depend on assistance." D i f f i cu l ty i n determining responsibi l ity for the m a r i t a l break is recognized. " I t may for pract ical reasons be found necessary to l i m i t the widow's insurance benefit to cases of formal separation, whi le m a k i n g i t clear t h a t she can i n a l l cases a t need get assistance and t h a t the M i n i s t r y of Social Security w i l l then proceed against the husband for recoup­m e n t of i ts expenditure . "

The plan proposes further to provide some

degree of protect ion for an unmarr ied person l i v ­i n g as a wi fe , sett ing f o r t h three m a i n principles for determining the type of approach to th is problem. A n unmarr ied m a n who has a non ­gainful ly occupied woman l i v i n g w i t h h i m as a wi fe should be able to ob ta in a dependent's allowance for her when ho is drawing unemploy­m e n t or d isabi l i ty benefits, br ing ing his benefits to the j o i n t rate for two persons; i t m a y be con­sidered r i g h t to exclude such allowances, however, i f the m a n already has a legal wife. Since widows ' and guardians' benefits are n o t financed f r om women's contr ibut ions , these benefits should be pa id only to the w o m a n who was the legal wife of the deceased man and such wife should be the solo beneficiary of the wife's ret i rement benefits t oward whi ch the m a n contributes ; any other woman who m a y l ive w i t h h i m as a wife should qual i fy for a ret i rement pension only on the basis of her own contr ibut ions . Despite the fact t h a t the 13-week m a t e r n i t y benefit is to some extent a compensation for the lower unemployment and d isabi l i ty benefits for w h i c h a ga infu l ly occupied marr ied woman m a y qual i fy i n her own r i g h t , " i t w i l l probably be felt r i g h t , i n the interests of the ch i ld , t o make th is benefit equally available t o unmarr ied mothers, so t h a t they may have the same o p p o r t u n i t y of w i t h d r a w i n g f rom gainful occupation a t the t ime of the confinement."

Funeral Grants

B u r i a l expenses i n Great B r i t a i n are ord inar i ly m o t through v o l u n t a r y industr ia l insurance, " a t an excessive expense—certainly i n admin is t ra t i on , probab ly also i n actual expenditure . " The social security p l a n proposes to include a universal funeral grant as one of the benefits i n the con­t r i b u t o r y social insurance program. T h i s grant , payable to the person responsible for funeral expenses, w o u l d amount to £6 ($24.21) for a ch i ld under 3 years of age, £10 ($40.35) for chi ldren aged 3-9, £15 ($60.52) for those aged 10-20, and £20 ($80.70) for adults . The deaths of persons aged 60 or over at the outset wou ld no t be covered b y this grant .

Average adminis trat ive expenses of industr ia l l i fe insurance offices i n 1937-40 were 37.2 percent of the premiums; the cost of administer ing funeral grants i n the social insurance program w o u l d be n o t more t h a n 2 or 3 percent of contr ibut ions for such benefits. Inc lus ion of funeral grants w o u l d

add only 2-3 cents a week to the cost of the con­t r i b u t o r y insurance stamps to be affixed to any insurance card. O n the benefit side, i t would mean paying one c laim only for each person w i t h respect to a fact concerning whi ch there could be no doubt and one w h i c h must be formal ly recorded by the Government for other purposes. " T h e r e can be no just i f i cat ion for requir ing the public who need insurance for direct funeral expenses to pay the heavy tax involved i n industr ia l assurance."

The existing criticisms of industr ia l insurance, i t s methods of house-to-house collection, high lapse rate , adminis trat ive costs, and burden on low-income families have led Sir W i l l i a m to pro­pose the transfer of this f orm of insurance among persons of l i m i t e d means f rom the sphere of com­mercial under tak ing to t h a t of public service Th is proposal is not classed as essential to the security plan as a whole. The alternat ive , assum­i n g inclusion of provision for funeral grants i n the social security plan, is to leave to the industr ia l life insurance offices "as business concerns the great and growing sphere which would s t i l l remain—of insurance for indirect expenses connected w i t h funerals, of life and endowment assurance for pur­poses other t h a n funeral expenses, and of insurance against minor needs." The risk of bur ia l costs is so general i n incidence t h a t i t should not be left to v o l u n t a r y insurance provisions. The grant pro­posed for the social security p lan would be a money grant and would not involve standardiza­t i on of funerals. Persons would be able to spend either more or less than the grants and to choose the undertaker, according to their resources and desires.

Public Assistance " H o w e v e r comprehensive an insurance scheme,"

the report declares, "some, through physical i n ­firmity, can never contr ibute at al l and some w i l l fa l l through the meshes of any insurance. The m a k i n g of insurance benefit w i t h o u t means test u n l i m i t e d i n durat i on involves of itself t h a t con­dit ions must be imposed at some stage or another as to how men i n receipt of benefit shall use their t ime , so as to fit themselves or to keep themselves fit for service; imposit ion of any condit ion means t h a t the condit ion m a y no t be fulf i l led and t h a t a case of assistance may arise. . . N a t i o n a l assist­ance is an essential subsidiary method i n the whole plan for social security, and the w o r k of the As-

sistance Board shows t h a t assistance subject to means test can be administered w i t h sympathet ic justice and discretion t a k i n g f u l l account of i n ­dividual circumstances. B u t the scope of assist­ance w i l l be narrowed f r om the beginning and w i l l diminish throughout the trans i t ion period for pensions."

As p a r t of the proposed plan, assistance wou ld be available to meet al l needs which are no t covered b y insurance; i t would meet needs up to the subsistence level b u t would not exceed t h a t level. T h o u g h d is t inct f rom social insurance, the assistance program would be administered as a minor b u t integral par t of the w o r k of the M i n i s t r y of Social Security. The insurance proposals w i l l make the permanent scope of assistance much less than at present. I t w i l l be needed p r i m a r i l y for (1) persons who fai l to fu l f i l l c ontr ibut ion condi­tions because they have less than the m i n i m u m number, because they never are able to w ork , because they are not receiving f u l l benefits for unemployment, d isabi l i ty , or ret irement , or be­cause as members of class I I or I V , they c laim and obtain exemption f rom contr ibutions by reason of insufficient income; (2) persons disqualified f r o m unemployment benefits b y refusal of suitable employment, leaving work w i t h o u t jus t cause, dismissal for misconduct, or failure to at tend a work or t ra in ing center; (3) persons w i t h abnormal needs for diet , care, or other matters ; (4) persons in need through noninsurable causes, such as some forms of desertion or separation.

Other special assistance problems may arise t o warrant assistance to persons involved i n a str ike or lock-out ; assistance on loan w i t h provision for subsequent reimbursement; and assistance i n k i n d . Moreover, there must be some provision for the l imited class of persons " w h o through weakness or badness of character fa i l to comply . . . I n the last resort the man who fails to comply . . . and leaves his fami ly w i t h o u t resources must be subject to penal t r ea tment . "

The proposed public assistance program would include pensions to the b l i n d now administered by the Customs and Excise Depar tment and assist­ance from local and vo luntary agencies. Present provisions comprise nat ional noncontr ibutory pen­sions for the b l i n d , subject to a means test and payable to persons 40 years of age and over on the same general basis as noncontr ibutory pensions for the aged; money grants f rom local authorit ies ,

conditioned on need; and local workshops, t r a i n ­i n g centers, and home teaching courses.

Since b y far the largest group of b l i n d persons lose their sight after age 50, most persons w o u l d be contr ibutors to the proposed social insurance p lan before blindness makes them incapable of w o r k . T h e y would , therefore, be ent i t led under t h a t p lan to appropriate rates of d isabi l i ty bene­f i t and subsequently to ret irement pensions. I n addi t ion , local authorities and v o l u n t a r y agencies should prepare revised plans for dealing w i t h the problems of blindness as a handicap no t on ly i n earning b u t i n a l l occupations, for furnishing the special subsistence needs of t o t a l l y or p a r t i a l l y b l i n d persons, and for prov id ing ins t i tu t i ona l care for the b l i n d .

Under the proposed publ ic assistance program, the three dif fering tests of need and means, now applied b y three separate authorit ies, for noncon­t r i b u t o r y pensions, supplementary pensions, and public assistance would be replaced " b y a test administered b y a single a u t h o r i t y on principles un i f o rm i n themselves, though t a k i n g account of the different problems which arise i n re lat ion to different classes." The needs of adults , chi ldren, and ret ired persons should be based on the same estimates of subsistence costs as those proposed for determining f u l l insurance benefits. D e t e r m i ­nat ion of ownership of resources does not seem to require mater ia l change i n procedures established under the existing D e t e r m i n a t i o n of Needs A c t . Methods of t reat ing resources of various k inds wou ld have to be established b y regulat ion. The t o t a l costs of nat ional assistance, inc luding a d ­m i n i s t r a t i o n , are estimated as 7, 5, and 4 percent of t o t a l proposed social security expenditures i n 1945, 1955, and 1965, respectively (table 6) . U n d e r the existing social insurance and assistance system, assistance expenditures were 8 percent of the t o t a l i n 1938-39 and represented 4 percent of the estimated t o t a l for 1945.

Children's Allowances Basic to the abo l i t i on of w a n t is the ad justment

of incomes to f a m i l y needs. T o this end, the social security p lan includes a general system of children's allowances for the maintenance of de­pendent chi ldren. These payments w o u l d be made to the persons responsible for the child 's care d u r i n g periods of earning as wel l as unemployment of such persons, for the fo l lowing reasons. " F i r s t

. . . social insurance should be p a r t of a policy of a nat ional m i n i m u m . B u t a nat ional m i n i m u m for families of every size cannot i n practice be secured b y a wage system, which must be based on the product of a man's labour and not on the size of his f a m i l y . . . Second, i t is dangerous to al low benefit d u r i n g unemployment or disa­b i l i t y t o equal or exceed earnings . . . The maintenance of employment . . . w i l l be i m ­possible w i t h o u t greater f l u i d i t y of labour and other resources i n the a f termath of war t h a n has been achieved i n the past. T o secure this , the gap between income d u r i n g earning and d u r i n g i n t e r r u p t i o n of earning should be as large as pos­sible for every m a n . I t cannot be kept large for men w i t h large families, except either b y m a k i n g their benefit i n unemployment and d isabi l i ty i n ­adequate, or b y g i v i n g allowances for chi ldren i n t ime of earning and not-earning a l ike . "

I n add i t i on , " ch i ldren 's allowances can help to restore the b i r t h rate , bo th b y m a k i n g i t possible for parents who desire more children to br ing them i n t o the wor ld w i t h o u t damaging the chances of those already born , and as a signal of the na ­t i ona l interest i n chi ldren, sett ing the tone of publ ic opinion. . . [Moreover] the small families of today make i t necessary t h a t every l i v i n g chi ld should receive the best care t h a t can be given to i t . "

Pract ical considerations make i t desirable t h a t children's allowances be provided entirely out of general taxat ion . " F i r s t , the f lat rate of c o n t r i ­b u t i o n required for purposes wh i ch should be c o n t r i b u t o r y is about as h igh as i t seems r i g h t to propose. . . Second, . . . [although] children's allowances should be given ma in ly i n cash, the a m o u n t of cash a t any t ime must be adjusted to the provision i n k i n d and this ad justment can probably be made more easily, i f the cost of al low­ances is provided f r o m the State than i f i t forms p a r t of a c ont r ibutory system."

I n v iew of the fact t h a t wages generally are adequate to cover the expenses of at least two adults and one ch i ld , and t h a t i t would be unde­sirable and unnecessary to relieve the parent of the whole cost of m a i n t a i n i n g his chi ldren, i t is proposed t h a t allowance should n o t be pa id for the first chi ld when the responsible parent is earning. Allowances wou ld be payable for a l l other children under age 15 (or age 16 i f a t t e n d ­i n g school f u l l t ime ) , whether or no t the parent or guardian was earning. The allowance should be

payable irrespective of f a m i l y income, since i t is believed t h a t l i t t l e saving would result f r om the establishment of any reasonable income l i m i t .

A n allowance at the average rate of 8s. ($1.61) per week is suggested, the amount to be graduated w i t h the age of the chi ld in order to compensate for the greater needs of older chi ldren. The cost of these allowances, exclusive of administrat ive expenses, is estimated at £110 mi l l i on ($444 mi l l ion) i n 1945 assuming omission of the first chi ld when the parent is not in receipt of benefits; the trend i n f e r t i l i t y rates w i l l increasingly deter­mine the cost i n later years. Inclusion of the first chi ld would increase the cost by about £98 m i l l i o n ($395 m i l l i o n ) . The proposed children's allowances, however, would replace various exist­ing payments—allowances for juvenile dependents under the unemployment insurance and assistance system, children's allowances and orphans' bene­fits under the contr ibutory pension system, and children's allowances under workmen's compensa­t i o n — w h i c h would cost approximately £11 mi l l i on ($44 mi l l ion) i n 1945.

For the adminis trat ion of the children's a l low­ances, the logical agency would be the M i n i s t r y of Social Security, since i t would have offices in every local i ty experienced i n the handl ing of claims. I f the allowance for the first chi ld is added to the parent's unemployment or d isabi l i ty benefit, this adminis trat ive integrat ion would be especially appropr i a t e A d d i t i o n a l provisions for the care and supervision of chi ldren could be ad ­ministered by welfare agencies concerned w i t h health and education, under arrangements for central and local cooperation w i t h the M i n i s t r y of Social Security.

Health and Rehabilitation Services T h e establishment of a comprehensive nat ional

health service for prevention and cure of d isabi l i ty and disease and for medical and postmedical t reat ­ment to rehabi l i tate disabled persons and f i t them for employment is considered a basic component of the social security p lan. " I t is a logical corol ­lary to the payment of high benefits i n d isabi l i ty t h a t determined efforts should be made b y the State to reduce the number of cases for which benefit is needed. I t is a logical corol lary to the receipt of h igh benefits i n d isabi l i ty t h a t the i n d i ­v idua l should recognize the d u t y to be wel l and to cooperate i n a l l steps which may lead to diagnosis

of disease i n early stages when i t can be prevented. Disease and accidents must be paid for in any case, in lessened power of product ion and i n idleness, i f not d irect ly by insurance benefits. One of the reasons w h y i t is preferable to pay for disease and accident openly and direct ly i n the form of insur­ance benefits, rather than indirect ly , is t h a t this emphasises the cost and should give a st imulus to prevention."

The plan would assure to al l B r i t i s h citizens whatever medical care they may require i n any necessary f orm, domic i l iary or ins t i tu t i ona l , i n ­cluding care by general practitioners, specialists, and consultants; provisions for dental , ophthalmic , and surgical appliances; nursing and obstetrical care; and rehabi l i tat ion after accidents. T h i s care would be organized by the national depart ­ments responsible for public health and should encompass positive and preventive as wel l as cura­tive measures. A l t h o u g h payments toward the costs m i g h t be included in the social insurance contributions (the proposed social security budget estimates t h a t £40 mi l l i on ($161 mi l l ion) out of total expenditures of £170 mi l l i on ($686 mi l l ion) for health and rehabi l i tat ion services i n 1945 would come from contr ibutions of insured persons), the care needed by any ind iv idua l would be provided wi thout contr ibut i on conditions.

Domic i l ia ry medical care is now available for persons insured under compulsory nat ional health insurance and is financed f rom contr ibutions under that act. Care for the dependents of insured workers must be obtained on a fee-for-service basis or, more rarely, by contr ibut ions through medical-care associations. I n s t i t u t i o n a l t reatment is not included in the present health insurance program, except to a small extent as an addit ional benefit. I t is obtainable f rom public hospitals subject to recovery of the cost, i . e., payment according to means or free for persons unable to pay. I t is also obtainable f rom pr ivate hospi­tals i n re turn for prepayment of dues under vo lun ­tary hospital insurance plans, which have grown remarkably i n recent years. Pr ivate hospitals also give some care for which payments are graduated to means. D e n t a l and ophthalmic t reat ­ment and appliances arc included as addi t ional treatment benefits for insured workers under pres­ent national health insurance b u t are generally obtained on a fee-for-service basis. Surgical app l i ­ances, convalescent homes, and nursing are even less

widely available as addit ional insurance benefits. The existing health insurance program i n Groat

B r i t a i n has ut i l ized f r iendly societies and other associations as an integral p a r t of administer ing cash benefits and medical t reatment for insured workers. These "approved societies" differ i n f o r m , composition, coverage, and financial status. A society m a y realize a surplus or deficit through adminis trat ion of the compulsory nat ional health insurance contributions which i t collects for the Government from its members. When there is a deficit, the society can give no addit ional benefits.

The Beveridge report holds t h a t the approved society system is inconsistent w i t h a nat ional policy of medical t reatment and m i n i m u m disabi l ­i t y benefits. I f the Government provides a m i n i ­m u m benefit based on subsistence needs, i t appears inequitable t h a t different rates of cash benefits should emerge f r om un i f o rm rates of c o n t r i b u t i o n ; i f any f o rm of medical t reatment is given as an addit ional , rather than s ta tutory , benefit, i t is given selectively, w i t h reference n o t to the degree to which i t is needed b u t according to the financial status of the society i n which the insured person is a member.

N o organized disinterested in format ion is ava i l ­able to guide insured persons i n the choice of soci­eties, and unless persons are members of some of the larger societies w i t h agencies everywhere, on change of residence they have no assurance of any personal t reatment or contacts i n their affiliations w i t h some other group. Approved societies have the r i g h t to reject membership applications f r om poor insurance r isks ; persons so rejected are i n ­sured by the Government . Some of these disad­vantages have become apparent only i n the course of t ime. The system made i t possible to b u i l d a compulsory nat ional health insurance program on the foundations of vo luntary insurance and ut i l i zed i n a wider field the experience and organization of the great fr iendly society movement. I t conflicts i r r e c o n c i l a b l y , however , w i t h the c o m p u l s o r y social insurance principles t h a t " a l l men should stand i n together on equal terms, t h a t no i n d i v i d ­ual should be entit led to c la im better terms because he is healthier or i n more regular employment . "

As a better basis for administer ing the proposed health insurance program, the M i n i s t r y of Social Security would be allowed to make arrangements w i t h societies which f u l f i l l certain conditions so

t h a t these societies could act as agents for a d m i n ­ister ing d isab i l i ty benefits to their members. These conditions wou ld be (1) provision of a sub­s tant ia l addi t ional or supplementary d isab i l i ty benefit f r om the society's resources, financed f r om the v o l u n t a r y contr ibut ions of members; (2) maintenance of an efficient system of sick v i s i t i n g , wherever i ts members m a y be; (3) effective self-governing operations; (4) nonprof i t organization and disassociation f r om any pro f i t organizat ion; (5) registrat ion under the Fr iend ly Societies A c t or the Trade U n i o n Acts , or substantial con formity w i t h requirements for such registrat ion.

The problem of existing collecting societies and industr ia l insurance companies is not so easily solved. The i r "service to nat ional health insur­ance is d irect ly associated w i t h the purpose of securing customers for industr ia l assurance, and has undoubtedly been of great advantage, to the industr ia l l ife offices i n the extension of their business." T h e services rendered b y these offices i n the past, i n prov id ing "ef f ic iently and on reasonable terms the machinery of health insur­ance for the large numbers of insured persons who were not members of fr iendly societies," should no t be be l i t t l ed , b u t i t is " impossible to contemplate an arrangement under which bodies w o r k i n g for pr ivate prof i t were allowed to act as agents of the social insurance fund a t the r isk of the fund , and to use this agency as a means of extending their business; on these terms the indust r ia l l i fe offices, so far f rom hav ing any m o t i v e for careful adminis trat ion of d isab i l i ty benefit, wou ld have a direct economic m o t i v e to be l iberal w i t h the money of the social insurance f u n d , i n order to ob ta in or retain customers for indust r ia l assurance and to increase the profits of their shareholders or the pay of their staf f . " T h e organized a b i l i t y and the experience of staff who now serve the industr ia l life offices m i g h t better be converted, the report maintains , f rom a competit ive business into a publ ic service.

Administration of the Proposal Plan Eleven or nearly hal f of the changes proposed

b y the Beveridge p lan deal w i t h changes i n present forms of admin is t rat ion . Some of these changes have been touched upon br ie f ly ; others, because of their far-reaching implications for exist ing agencies, need special ment ion .

The report advocates:

(1) Establ ishing a nat ional M i n i s t r y of Social Security w i t h responsibil ity for collecting the single unified weekly contr ibutions f rom al l insured persons and f rom employers on behalf of all employed persons, for administer ing the unified social insurance fund i n wh i ch al l such contr ibu­tions are collected, for paying al l cash benefits, grants, and allowances f rom t h a t fund , for paying children's allowances from funds provided by the N a t i o n a l Exchequer, and for mak ing assistance payments f rom Exchequer funds to needy persons;

(2) M e r g i n g existing separate social insurance funds, so far as deposits and benefits are con­cerned, b u t not necessarily preventing segregation of the accounts for unemployment , d isabi l i ty , and ret irement benefits w i t h i n tha t f u n d ;

(3) W i t h d r a w i n g a u t h o r i t y for approved socie­ties to collect health insurance contr ibutions from their insured members and to pay benefits under the compulsory insurance system i n conjunction w i t h the addit ional d isabi l i ty benefits w h i c h the favorable financial posit ion of some approved societies has made possible;

(4) Separating medical t reatment from the ad­min is t ra t i on of cash sickness and d isab i l i ty benefits and sett ing up , under the supervision of the health departments, a comprehensive medical service for a l l citizens, covering al l t reatment and every form of d i sab i l i t y ;

(5) Abol ishing the existing provisions for w o r k ­men's compensation and merging administrat ion of d isabi l i ty benefits for accidents and disease of industr ia l and nonindustr ia l or igin in the M i n i s t r y of Social Security ;

(6) Abandoning separate unemployment insur­ance systems for agriculture, and for banking , finance, and insurance industries by amalgamation of such separate programs w i t h the unified social insurance system;

(7) Transferr ing to the M i n i s t r y of Social Security the public assistance functions of local authorit ies except for t reatment and services of an ins t i tu t i ona l character;

(8) Transferr ing to the M i n i s t r y of Social Security responsibil ity for maintenance of b l i n d persons and establishing a new plan for ma inte ­nance and welfare of b l ind persons through cooperation of the M i n i s t r y , local authorit ies , and v o l u n t a r y agencies;

(9) Transferr ing to the M i n i s t r y of Social Security the functions of the Assistance B o a r d ,

the work of the Customs and Excise Depar tment in connection w i t h noncontr ibutory pensions, and probably the employment service of the M i n i s t r y of Labour and N a t i o n a l Service, i n addi t ion to unemployment insurance, and the w o r k of other departments i n connection w i t h the adminis tra ­tion of cash benefits of a l l k inds ;

(10) Subst i tut ing a Social Insurance Statutory Committee for the Unemployment Insurance Committee and widening its powers;

(11) Convert ing the business of industr ia l insurance into a publ ic service under an I n d u s t r i a l Assurance B o a r d — a tentat ive proposal.

The M i n i s t r y of Social Security, under a Cabinet Minister, would establish a network of regional and local security offices for the administrat ion of cash benefits, assistance, and related activit ies , but would not be responsible for medical services, which would fal l w i t h i n the sphere of the health departments. There would be, however, a j o i n t committee of the M i n i s t r y of Social Security and all departments concerned w i t h health and welfare to promote measures designed to prevent disease and reduce the burden to be borne by the social insurance fund . I m p o r t a n t organizational aims of the M i n i s t r y of Social Security would be (1) decentralization and close contact w i t h local agencies of a l l kinds in dealing w i t h the varied needs of insured persons and (2) selection and t r a i n ­ing of staff w i t h special regard to their functions i n serving the public and i n understanding the human problems w i t h which they would be concerned.

Unification of administrat ive responsibil ity for the plan is urged for the fo l lowing reasons: con­venience to the insured person of hav ing one authority to deal w i t h , " i n place of being bandied about f rom pi l lar to p o s t " ; avoidance of demarca­tion problems—disputes as to which a u t h o r i t y is responsible for dealing w i t h a part i cular case and on what principles; avoidance of overlapping and duplication of benefits; avoidance of gaps i n insur­ance; absolute security of benefit ; u n i f o r m i t y of benefit rates and conditions, unless di f ferentiation is justifiable by real differences of need or other circumstances; u n i f o r m i t y of procedures for deter­mining claims to benefits, except insofar as differ­ences are just i f ied.

" I t is clear," Sir W i l l i a m maintains , " t h a t the administration of the M i n i s t r y of Social Security must be decentralised, so t h a t i t s local officers are in int imate touch w i t h the problems and c i r cum­

stances i n the ir localities. T h i s can be secured w i t h o u t mak ing these officials servants of, and subject to the contro l of, the local a u t h o r i t y . The present i m p o r t a n t funct ion of the rel ieving officer of g iv ing relief i n cases of sudden and urgent necessity w i l l , i n future , have to be performed b y the equivalent local officer of the M i n i s t r y of Social Security. There is no di f f i culty i n practice i n arranging for local adminis trat ion by local of f i ­cials of a central department . B u t , to make such officials servants of the local a u t h o r i t y means either t h a t the local a u t h o r i t y has discretion i n spending money to wh i ch i t does no t contr ibute i n any way and i n which , therefore, i t has no mot ive to economise, or t h a t i t has no discretion, i n which case the local a u t h o r i t y becomes an agent w i t h o u t responsibil ity. I t is neither desirable for the strength of local democracy t h a t local a u t h o r i ­ties should have to administer a service w i t h o u t discretion and according to detailed rules nor compatible w i t h a nat ional m i n i m u m and a nat ional p lan of social security t h a t people should be given assistance according to a scale and con­dit ions which v a r y f rom place to place."

Local authorit ies wou ld s t i l l have the i m p o r t a n t and growing task of organizing and ma in ta in ing inst i tut ions of various kinds for t reatment and welfare. The report declares t h a t , i n view of the increasing number of o ld persons, there is probably considerable scope for developing services con­cerned w i t h the recreation and welfare of the aged, inc luding housing facilities. Local author ­ities would play an i m p o r t a n t p a r t i n the develop­ment of domic i l iary care under the nat ional hea l th service and i n other fields of social welfare, such as housing, education, and the recreational and c u l ­t u r a l services.

W a r a n d P o s t - W a r A i m s

" A b o l i t i o n of w a n t cannot be brought about merely b y increasing product ion , w i t h o u t seeing to correct d i s t r ibut i on of the product ; b u t correct d i s t r ibut i on does not mean w h a t i t has often been taken to mean i n the pas t—dis t r ibut i on between the different agents i n product ion, between land , capital , management and labour. Bet ter d i s t r i b u ­t i o n of purchasing power is required among wage earners themselves, as between times of earning and no t earning, and between times of heavy f a m i l y responsibilities and of l i g h t or no f ami ly

responsibilities. B o t h social insurance and c h i l ­dren's allowances are p r i m a r i l y methods of redis­t r i b u t i n g weal th . Such better d i s t r ibut i on cannot fa i l to add to welfare and, properly designed, i t can increase wealth , b y mainta in ing physical vigour. I t does no t decrease weal th , unless i t involves waste i n adminis trat ion or reduces incentives to product ion. Unemployment and d isab i l i ty are already being pa id for unconsciously; i t is no add i ­t i o n to the burden on the c o m m u n i t y to provide for them consciously. Uni f ied social insurance w i l l el iminate a good deal of waste inherent i n present methods. Properly designed, control led and financed, i t need have no depressing effect on incent ive . "

A f te r t r i a l of a different principle , " i t has been found to accord best w i t h the sentiments of the B r i t i s h people t h a t i n insurance organised by the c o m m u n i t y b y use of compulsory powers each i n d i v i d u a l should stand i n on the same terms; none should c la im to pay less because he is hea l th ­ier or has more regular employment . " I n accord w i t h t h a t view, the proposals of the report m a r k another step f o rward to the development of social insurance as a new type of h u m a n i n s t i t u t i o n , di f fering b o t h f r om the former methods of pre­vent ing or a l lev iat ing distress and f rom v o l u n t a r y insurance.

" T h e r e w i l l , i t m a y be hoped, come a season when i t is profitable to consider the practical re la­tions of social insurance i n B r i t a i n and of schemes for the same purpose i n the Dominions , i n the Colonies and i n other countries of the wor ld . On the assumption t h a t once again i t w i l l be possible for men to move f r om one country to another to find the best use for their powers, i t w i l l be desirable to consider the m a k i n g of reciprocal arrangements between the schemes of different countries f a c i l i t a t ing transfer f rom one to the other, t h a t is to say, arrangements enabling men on migra t i on to avoid for fe i t ing security and a l lowing t h e m to carry w i t h them some of the r ights t h a t they have acquired i n their former c o u n t r y . "

I n concluding his report , Sir W i l l i a m Beveridge answers i n the af f irmative the question whether i t is possible to give due consideration to recon­s truct ion problems i n t ime of war. The current interest i n these problems, the common concern of a l l citizens i n the prevention of w a n t and the d i m i n u t i o n and relief of disease, and the sense of nat ional u n i t y and readiness to sacrifice personal interests to the common cause, may make i t possible, he declares, to br ing about changes which w i l l be acceptable to a l l but which would have been di f f icult to make at other times. "There appears at any rate to be no doubt of the determinat ion of the B r i t i s h people, however hard pressed i n war, no t to l ive whol ly for war, not to abandon care of w h a t may come after. T h a t , after a l l , is i n accord w i t h the nature of democracies, of the sp ir i t i n which they fight and of the purpose for which they fight. They make war, today more consciously than ever, not for the sake of war , not for dominion or revenge, but war for peace. I f the united democracies today can show strength and courage and imagination equal to their manifest desire, can plan for a better peace even while waging to ta l war, they w i l l w i n together two victories which in t r u t h are i n d i v i s i b l e . "

"Freedom from w a n t , " he continues, "cannot be forced on a democracy or given to a democracy. I t must be won by them. W i n n i n g i t needs courage and f a i t h and a sense of nat ional u n i t y : courage to face facts and difficulties and overcome t h e m ; f a i t h i n our future and i n the ideals of fair-play and freedom for which century after century our forefathers were prepared to die ; a sense of nat ional u n i t y overr id ing the interests of any class or section. The plan for social security in this report is submit ted by one who believes that i n this supreme crisis the B r i t i s h people w i l l not be found want ing , of courage and fa i th and na­t ional u n i t y , of material and sp ir i tua l power to play their par t i n achieving bo th social security and the v i c t o r y of justice among nations upon which security depends."